India's troubled shadow lenders show signs of revival on stimulus

The sound health of shadow banks is vital because they form the backbone of the Indian economy in lending to a wide range of borrowers from small merchants to business giants

The fortunes of India’s shadow lenders are showing signs of turning, suggesting stimulus measures from policy makers will help the troubled sector weather some of the fallout from the pandemic.

Premiums that investors seek to buy AAA rated five-year bonds of non-bank lenders over similar-maturity government notes narrowed the most last month since at least 2012, helping a gauge measuring bond spreads to strengthen. A custom index of shares of 20 financial firms and other companies also improved.

Strengthening Signals

Investors seek lower premiums to buy shadow bank bonds amid buoyant liquidity

The sound health