The health of India’s NBFCs remained resilient in August, suggesting that record stimulus steps by the central govt are helping the crisis-hit sector ride out the pandemic.
Premiums on non-bank lenders’ bonds narrowed to a two-year low, according to an index of AAA-rated five-year notes. Three other indicators compiled by Bloomberg, covering areas including liquidity and share performance, stayed steady from the previous month, with two at levels indicating strength.
India’s non-bank lending sector was hit by a crisis in 2018 when a large financier unexpectedly defaulted, and the nation now needs it to stay healthy in order to prevent the gross domestic product from shrinking further. The reach of shadow banks extends into many corners of the economy, as they lend to a wide range of businesses from road-side teashops to tycoons.
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