India’s Shadow Lenders Retreat as Bad Loans Rise Amid Crackdown
- Shadow lenders, banks see higher stress in unsecured lending
- Demand for consumer credit starts to moderate after surge
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Six years after India’s shadow-banking sector blew up, pockets of stress are building again, prompting firms to start pulling back amid scrutiny from the regulator.
Bajaj Finance Ltd., the country’s largest shadow lender, joined rivals including Shriram Finance Ltd., Mahindra & Mahindra Financial Services Ltd., and IIFL Finance Ltd. that posted higher delinquencies on unsecured loans in their second quarter earnings reports. Most firms also set aside more capital for provisions and had lower profits than expected.