MUMBAI: There is a rising risk of contagion in India’s banking sector withmany finance companies having lost more than half of their equity value inthe past year, rating agency Standard & Poor’s said on Wednesday.
India’s non-banking finance companies, or more popularly “shadow banks”,went into a tailspin after the collapse of infrastructure lending behemothInfrastructure Leasing and Financial Services (IL&FS) in September lastyear.
The financial companies in India are among the largest borrowers and asubstantial part of their funding comes from banks.
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The Reserve Bank of India has been closely monitoring the top 50non-banking finance companies to ascertain if there is any rising systemicrisk with more such institutions having failed over the last year,including housing finance major Dewan Housing Finance Ltd.
