India banking

Why India’s NBFC bailout is no long-term solution

New Delhi will fall into the same situation facing the banking sector if it relies on government funds to support non-bank financial companies. An overhaul of funding channels is necessary.

India’s troubled shadow banking sector can heave a sigh of relief after the government announced plans last week to grant Rs1 trillion ($14.6 billion) of credit guarantees to struggling non-bank financial companies (NBFC), the latest attempt by New Delhi to avoid a full-blown financial crisis.

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