Economics
A Surge in Bad Debt Is Set to Worsen India Shadow Bank Woes
- The sector’s bad debt is at highest in at least five years
- Rating outlooks for many non-bank firms turned negative: Fitch
This article is for subscribers only.
India’s troubled shadow banks face mounting challenges to a nascent recovery from the pandemic, with their asset quality set to deteriorate further as flagged recently by the financial regulator.
Non-performing assets already swelled in the most recent data to the highest in at least five years, at 6.3% as of March 2020 even before the worst of the pandemic impact, the Reserve Bank of India said in a report last week. That’s up 100 basis points from a year earlier, and the RBI forecasts it’s headed higher.