SHADOW LENDERS
![India’s biggest shadow bank Bajaj seeks up to $500 million loan](https://img.etimg.com/thumb/msid-112481755,width-100,height-75,resizemode-4/industry/banking/finance/indias-biggest-shadow-bank-bajaj-seeks-up-to-500-million-loan.jpg)
India’s biggest shadow bank Bajaj seeks up to $500 million loan
Bajaj Finance Ltd. intended to raise up to $500 million from overseas markets. The company is negotiating with at least four foreign banks for terms of the loan, which will be priced against the Secured Overnight Financing Rate. This move comes after new RBI rules limited domestic borrowing options for shadow financiers.
![Bank loans to shadow lenders drop, credit card outstanding rises](https://img.etimg.com/thumb/msid-112196199,width-100,height-75,resizemode-4/industry/banking/finance/banking/bank-loans-to-shadow-lenders-drop-credit-card-outstanding-rises.jpg)
Bank loans to shadow lenders drop, credit card outstanding rises
By June 2024, growth in bank credit to NBFCs had fallen to 8.5% from 16% in May. Credit card and gold jewellery loans, however, saw substantial growth. Commercial real estate and personal loans, particularly home loans, also grew significantly, influenced by the HDFC-HDFC Bank merger.
![Piramal Finance plans up to $500 million debut dollar-bond issue](https://img.etimg.com/thumb/msid-111568193,width-100,height-75,resizemode-4/markets/bonds/piramal-finance-plans-up-to-500-million-debut-dollar-bond-issue.jpg)
Piramal Finance plans up to $500 million debut dollar-bond issue
Billionaire Ajay Piramal’s firm is in talks with a group of global investment banks to raise $300 million to $500 million via such notes with a tenor of three to five years, the people said, asking not to be identified as the discussion are private.
![Indian financiers’ debt lures buyers on widest spread since 2020](https://img.etimg.com/thumb/msid-111299939,width-100,height-75,resizemode-4/markets/bonds/indian-financiers-debt-lures-buyers-on-widest-spread-since-2020.jpg)
Indian financiers’ debt lures buyers on widest spread since 2020
Investors are wary of funding strains affecting the rapid economic growth in India, despite enticing opportunities in shadow lender bonds. The concern lies in the widening spreads and the potential hurdles that could impede the country's impressive growth trajectory.
![RBI warns NBFCs a mode they use for giving loans may bring grief](https://img.etimg.com/thumb/msid-110173859,width-100,height-75,resizemode-4/industry/banking/finance/banking/rbi-warns-nbfcs-a-mode-they-use-for-giving-loans-may-bring-grief.jpg)
RBI warns NBFCs a mode they use for giving loans may bring grief
Bank Loans: The Reserve Bank of India has issued a caution to non-bank finance companies, advising them against becoming overly reliant on algorithm-based credit models. RBI Deputy Governor Swaminathan J flagged the importance of maintaining a balanced approach in credit assessment, highlighting potential risks associated with over-reliance on historical data and algorithms.
![Asian junk bond sales are hottest in five years on India boom](https://img.etimg.com/thumb/msid-109972104,width-100,height-75,resizemode-4/markets/bonds/asian-junk-bond-sales-are-hottest-in-five-years-on-india-boom.jpg)
Asian junk bond sales are hottest in five years on India boom
Regional sales of such corporate notes, outside of Japan, touched $5.9 billion so far this year, already surpassing $4.4 billion in all of 2023, according to Bloomberg-compiled data. Indian borrowers have topped the share of sales so far this year, with nearly 44% share.
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NBCC to set up shadow lender to help save over $100 mn
India's state-run NBCC plans to establish its own NBFC to reduce borrowing costs for infrastructure projects, potentially saving $108 million over two years. The company's board discussed the proposal in March, aiming for approval from the new administration post-elections. NBCC eyes RBI license; past attempts to set up NBFC failed.
India’s crackdown on financial risks puts industry on watch
RBI has been concerned about round-tripping of potentially bad loans, rise of unsecured lending and heavier linkages between AIFs and regulated entities, all of which can “potentially build up stress in the financial sector,” said Abizer Diwanji, financial services leader at Ernst & Young India.
RBI Deputy Governor Swaminathan wants lenders to 'curtail' consumption loans
Swaminathan J, a deputy governor at the Reserve Bank of India, today said the central bank wants lenders to cut down on consumption loans or unsecured loans with undefined end use. Deputy Governor M Rajeshwar Rao also supported and said the move to increase risk weights for unsecured loans is a prudential measure to curb growth or moderate credit growth to certain sectors.
Absent Putin and Ukraine war cast long shadow over G20
The absence of Russian President Vladimir Putin and Chinese President Xi Jinping at the G20 summit is expected to have a significant impact on the proceedings. While Xi's absence will stifle progress on global economic issues, it is Putin and the war in Ukraine that are likely to dominate and hamper progress. The G20 is facing challenges such as high global inflation, slowing growth, and debt struggles, in addition to long-term issues like climate change and sustainable development.
View: India sees a shadow-banking boom despite China’s funk
Shadow banks in India are experiencing a surge in growth as they diverge from their counterparts in China. Mukesh Ambani's Jio Financial Services made its stock-market debut with a $19 billion valuation, while Bajaj Finance is the market leader with 29-31% asset growth. In contrast, shadow banking in China is facing a liquidity crunch due to a real estate slump.
Budget 2023: Indian shadow lenders call for rescue route from cumbersome compliance maze
Union Budget 2023: Most NBFCs believe they don’t have the required visibility and control in their organization's compliance program, according to report from TeamLease Regtech. The compliance challenge also abates NBFCs expansion process. The ad-hoc, paper-based, and people-dependent processes fail to scale due to these compliance codes. India's upcoming Budget thus has a task in hand to ease the cumbersome compliance burden.
Shriram Finance secures $100 million loan from Asian Development Bank
Indian shadow lender Shriram Finance Ltd said on Friday it had secured a five-year loan worth $100 million from the Asian Development Bank to provide credit to its customers towards purchase of new and used vehicles across India.
NBFCs turn to newer asset classes in quest for returns
Focus shifts from home and vehicle finance, the traditional mainstays, to unsecured and MSME loans in quest for returns. Now, stronger balance sheets with higher provisioning and lower leverage, receding asset-quality concerns, and steadily normalising funding access provide NBFCs a strong foundation to boost growth as credit demand piggybacks the ongoing economic rebound.
Indian NBFCs with strong balance sheets have muscle power to lift assets under management, says CRISIL
"There are more tailwinds than headwinds," Crisil senior director Krishnan Sitaraman said. He said that stronger balance sheets with higher capitalisation and higher provision buffers, along with receding asset-quality concerns have put NBFCs on a solid foundation to capitalise on credit demand.
India's shadow lender Piramal sees no slowdown in credit growth
PIRAMAL-India's shadow lender Piramal sees no slowdown in credit growth.
Improving fundamentals to propel rally in PSU banks
What's driving investors to a lending pocket more or less neglected until recently? Analysts attribute the appetite to improvement in asset quality and liquidity, and a sharp pickup in credit growth - sharp enough for banks to step in and supplement bonds at borrowing corporates.
Warburg eyes 30% stake in Indian shadow bank Vistaar for $150 mn: Sources
Founded in 2010, Vistaar provides small business loans to shops, mills, hotels and manufacturers. It operates 196 branches in 12 Indian states and has lent more than $300 million so far, according to its website. It says it typically extends business loans of $1,200 to $60,000 for five to 10 years.
India's NBFCs on a stronger wicket now, RBI economists say
Based on supervisory data, in quarter-ending December 2021, the consolidated balance sheet of NBFCs grew at a faster pace than the corresponding period in the previous year. The bottom lines of the NBFC sector also improved in Q2 and Q3: 2021-22 with the waning of the second wave of COVID-19.
Pushback on crypto ‘shadow ban’; Amazon to absorb Cloudtail, Prione employees
Now, many top banks which have blocked UPI for trading crypto based on “verbal instructions” from NPCI, want it to spell out the rules in writing.
Ukraine crisis cast shadow over Russia-China ties
Russian military operations in Ukraine may cast a shadow over Beijing’s close ties with Moscow and ties could be in for bumpy ride. Certain Chinese intellectuals and Chinese banks are developing cold feet over Russia.
Shadow lender Magma Fincorp surges as billionaire Adar Poonawalla buys control
The company’s shares gained 10% in Mumbai on Thursday, making them set for the biggest advance since July 2019.
Top shadow lender Shriram City turns cautious, cuts loans to its most prized customers by 99%
Shadow lenders in India supply last-mile credit to businesses such as mom-and-pop stores, small restaurants, and individuals who need to purchase a new refrigerator or car. The bulk of Shriram City’s customers seek loans of less than Rs 15 lakh each, and are probably among the most vulnerable in an economy forecast to shrink for the first time in decades.
Why loan-to-value hike may destroy value of shadow lenders
The permissible loan to value ratio (LTV) for gold loans was raised to 90% from 75% in the latest RBI monetary policy, helping the cash-strapped to access more funds against pledged gold amid a surge in the price of the yellow metal.
India funds halve shadow bank debt holdings as crisis persists
Shadow banks are important lenders to smaller businesses, and policymakers have rolled out measures to support the financiers in recent months, helping to bring down their borrowing costs.
Indian lenders need capital to face virus, says Uday Kotak
A legacy of bad loans and a shadow banking implosion left lenders weakened coming into the lockdown.
Fresh crisis looms for shadow banks after fund shuts
Spreads on AAA rated five-year bonds of shadow lenders have soared to an eight-year high.
India's investment policy upsets Xiaomi, Oppo's consumer finance plans
Xiaomi and Oppo, with more than 100 million in combined smartphone users in India, cannot directly lend to consumers without a shadow banking licence and have partnered with Indian financial companies to provide the funds for services offered on their platforms.
At mercy of banks, India's cash-tight shadow lenders face new turmoil
All major lenders have stopped lending to NBFCs due to concerns about their financial health.
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