Risk of contagion in Indian financial sector rising; failure of any large finance firm will adversely impact economic growth: S&P
5 years, 2 months ago

Risk of contagion in Indian financial sector rising; failure of any large finance firm will adversely impact economic growth: S&P

Firstpost  

New Delhi: The Indian financial sector is facing the rising risk of contagion and failure of any large finance company will adversely impact economic growth, S&P Global Ratings said in a report on Wednesday. The failure of any large non-banking financial company or housing finance company may deliver a solvency shock to lenders,” said S&P Global Ratings credit analyst Geeta Chugh. “While many public sector banks are weak, people draw comfort from their state ownership and the repeated demonstrations of government support for the institutions–for example through regular capital infusions,” it said. “In the currently fragile financial markets, government support and swift action are essential to maintaining system stability,” the report ‘Indian Financial Sector Braces For Fat Contagion Tail Risk’ noted.

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History of this topic

Microfinance risk: Small loans can spell big trouble for Indian banks
2 months ago

Microfinance risk: Small loans can spell big trouble for Indian banks

Live Mint  

Once bitten twice shy" goes the old adage. Driven perhaps by the lack of credit demand from corporates, a boom in retail credit, an eagerness to bridge the last- mile gap in credit delivery and pressure to achieve priority-sector lending targets, banks seem to have lowered their guard and gone overboard in extending such loans. To its credit, the Reserve …

Economic Survey 2023-24: Displaying stellar show banking, financial sectors must brace for likely vulnerabilities
5 months, 3 weeks ago

Economic Survey 2023-24: Displaying stellar show banking, financial sectors must brace for likely vulnerabilities

The Hindu  

With India’s banking and financial sectors displaying a stellar performance in FY24 and as India’s financial sector undergoes critical transformation, it must brace for likely vulnerabilities originating globally or locally, the Economic Survey 2023-24 has cautioned. Economic Survey 2023-24 LIVE updates In FY24 bank credit witnessed double digit and broad-based growth and asset quality improved dramatically with gross and net …

Indian banks well placed to ride on economic growth: Moody’s
7 months ago

Indian banks well placed to ride on economic growth: Moody’s

The Hindu  

Indian banks and non-bank finance firms are well placed to seize opportunities from India’s strong economic prospects through lending growth in sectors like infrastructure, energy transition, manufacturing, small businesses and retail, Moody’s Ratings said on Wednesday. Moody’s said credit quality of India’s financial system has strengthened over the past 3-4 years due to record-high profitability, low delinquencies and stable domestic …

Indian economy makes solid recovery despite global headwind: RBI Governor Das
1 year, 6 months ago

Indian economy makes solid recovery despite global headwind: RBI Governor Das

The Hindu  

Reserve Bank Governor Shaktikanta Das on June 28 said that the Indian economy has made a solid recovery and is among the fastest-growing large economies despite heightened uncertainties and formidable headwinds. The global financial system has been impacted by significant strains since early March 2023 from the banking turmoil in the U.S. and Europe. Since the last issue of the …

Silicon Valley Bank ‘contagion’ may leave India unscathed
1 year, 10 months ago

Silicon Valley Bank ‘contagion’ may leave India unscathed

The Hindu  

The failure of the U.S.-based Silicon Valley Bank may only hit some Indian tech startups and IT firms for now, while any broader “contagion” effects that may arise will neither reach Indian shores in a hurry nor are they likely to trigger “systemic risks”, according to top Finance Ministry officials. However, the Central government is cognisant of the fact that …

Big tech firms offering financial services pose risk to financial stability: RBI
2 years, 6 months ago

Big tech firms offering financial services pose risk to financial stability: RBI

Firstpost  

Big techs can scale up rapidly and pose risk to financial stability, which can arise from increased disintermediation of incumbent institutions, RBI stated Mumbai: Big tech companies offering financial services pose risk to financial stability as their complex intertwined operational linkages with financial institutions could lead to contagion effect and potential anti-competitive behaviour, the Reserve Bank of India has said. …

Developing countries face growing risks from financial fragility: World Bank
2 years, 10 months ago

Developing countries face growing risks from financial fragility: World Bank

India TV News  

Highlights Developing countries face growing risks from financial fragility created by Covid crisis World Bank urged policymakers to focus on creating healthier financial sectors WB chief said it's critical to work toward broad-based access to growth-oriented capital allocation Developing countries face growing risks from financial fragility created by the Covid-19 crisis and non-transparent debt, the World Bank has said in …

India's economy to grow at 9.3% in FY22, risks persist: Moody's
3 years, 7 months ago

India's economy to grow at 9.3% in FY22, risks persist: Moody's

Hindustan Times  

India's economy will rebound in the current financial year to mark a growth of 9.3 per cent but the second Covid-19 wave has increased risks to the country's outlook with potential longer-term credit implications, Moody's Investors Service said on Tuesday. "We expect a decline in economic activity in the April to June quarter followed by a rebound, resulting in real, …

Non-performing Loans in Indian Banking Sector to Rise in Next 12-18 Months: S&P
4 years, 1 month ago

Non-performing Loans in Indian Banking Sector to Rise in Next 12-18 Months: S&P

News 18  

Non-performing loans in the Indian banking sector is likely to witness an uptick and may shoot up to 11 per cent of gross loans in the next 12-18 months, S&P Global Ratings said on Tuesday. It said forbearance is ”masking” problem assets for Indian banks arising from COVID-19 and the financial institutions will likely have trouble maintaining momentum after the …

COVID-19 impact: Moody's changes outlook on Indian banks to negative from stable; move triggered by disruption in economic activity
4 years, 9 months ago

COVID-19 impact: Moody's changes outlook on Indian banks to negative from stable; move triggered by disruption in economic activity

Firstpost  

Moody’s said Banks’ asset quality will deteriorate across the corporate, small and medium enterprises and retail segments, leading to pressure on profitability and capital. Moody’s Investors Service on Thursday changed the outlook for Indian banking system to negative from stable, as it expects deterioration in banks’ asset quality due to disruption in economic activity from the coronavirus outbreak. On Thursday, …

A battered IndusInd Bank lays bare RBI’s financial stability challenge
4 years, 9 months ago

A battered IndusInd Bank lays bare RBI’s financial stability challenge

Live Mint  

India’s private sector banks are facing their toughest test yet with a virus outbreak putting their earnings at risk, even as the collapse of a peer bank raises questions on deposits. The bank’s stock dropped 15% on Tuesday after the lender revealed in an investor call that it has lost 10-11% of its deposits since Yes Bank Ltd crumbled earlier …

India's financial system stable despite weakening economic growth, says RBI
5 years ago

India's financial system stable despite weakening economic growth, says RBI

India Today  

India's financial system remains stable even after economic growth plummeted to a six-year low, the Reserve Bank of India said on Friday. "Reviving the twin engines of consumption and investment while being vigilant about spillovers from global financial markets remains a critical challenge going forward," the central bank said in its bi-annual Financial Stability Report released on Dec. 27. State-owned …

IIFL bets on India’s beleaguered financial sector
5 years, 1 month ago

IIFL bets on India’s beleaguered financial sector

Live Mint  

IIFL Asset Management Ltd., which oversees $3.3 billion in assets, is set to expand on a strategy of investing in the most stressed area of India’s economy: the financial services industry. The firm aims to eventually attract $1 billion from funds globally to invest in the nation’s privately owned banks, shadow lenders, insurance companies, asset management firms, stock exchanges and …

Challenges ahead for most Indian non-financial companies in 2020: Moody's
5 years, 1 month ago

Challenges ahead for most Indian non-financial companies in 2020: Moody's

India TV News  

Driven by sluggish economic growth and slowing earnings, credit conditions will weaken for most Indian non-financial companies in 2020, Moody's Investors Service said on Thursday. "Upside factors for Moody's outlook on India’s non-financial companies include a ramp up of government’s stimulus measures aimed at reviving consumption demand, and better funding and market liquidity conditions whereby domestic demand and consumer funding …

Resolving India’s banking crisis
5 years, 8 months ago

Resolving India’s banking crisis

The Hindu  

The government that assumes office after the general election will have to crack a serious and unresolved problem: India’s banking sector. Public sector banks accounted for ₹8.9 trillion, or 86%, of the total NPAs. In 2018, the State Bank of India’s gross NPA/gross advances ratio was 10.9%. Second, the government must infuse at one go whatever additional capital is needed …

’India is a very self-correcting country’: Rashesh Shah
5 years, 9 months ago

’India is a very self-correcting country’: Rashesh Shah

Live Mint  

Mumbai: From a small office in downtown Mumbai to an imposing steel-and-glass building overlooking the city’s Bandra-Kurla Complex financial hub, Rashesh Shah, 55, has come a long way. Shah, armed with an MBA from India’s top business school and expertise gleaned from his time at one of the nation’s largest banks, partnered with a colleague in 1995 to set up …

Opinion | Debt market worries for the stock market
6 years, 3 months ago

Opinion | Debt market worries for the stock market

Live Mint  

The financial sector dominated the Indian stock market last week and is likely to remain in focus in the near term. Although the fund house and Dewan Housing Finance executives came out to explain their position, it was not enough to calm the market. Since NBFCs don’t have a sticky deposit base unlike banks, some of the highly leveraged entities …

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