Shadow Bank Recovery Stalls in India as Loan Fears Resurface
- Bond spreads rose for first time in four months in September
- RBI unveiled new stimulus in October to support credit market
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Signs of a recovery for India’s troubled shadow banks have taken a step backward as concerns reemerged about the true impact of the pandemic on the lenders.
Average spreads on the lenders’ AAA rated five-year bonds rose for the first time in four months in September. Of three other gauges tracking shadow bank sector health compiled by Bloomberg, two including banking system liquidity and outstanding debt weakened, while a share performance index stayed put.