A health check on India's shadow banks shows the crisis is far from over

Troubles began last year when major shadow bank IL&FS Group unexpectedly defaulted, prompting broader shock that made it hard for many companies to refinance debt

A health check on India’s shadow banks shows the crisis in the industry is far from over.

Indicators from liquidity to share performance show weakness, according to data compiled by Bloomberg as of September 30. In recent weeks, another financier defaulted, it got harder for investors to cut losses in the sector’s debt and a mortgage lender altered financing plans due to waning appetite for shadow bank bonds.

Banking system liquidity stayed lower last month, the premium that investors demand to hold shadow lender bonds over sovereign notes remained elevated and a custom gauge of shares of 20 financial firms