Low Borrowing Costs Can’t Save India Shadow Banks in Crisis
- Bond spread metric falls for a second month amid ample cash
- S&P Global cut credit scores of several financiers last month
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India’s shadow banks are benefiting from a drop in borrowing costs after government stimulus steps, but the troubled sector faces more challenges ahead as the economy reels from the pandemic.
The lenders’ borrowing costs declined in June for a second straight month, according to a gauge that’s among four indicators compiled by Bloomberg to check on the health of the industry. But the fall is primarily because of easy cash conditions in the nation’s banking system and not because businesses have strengthened, according to Sundaram Asset Management Co.