India may see fall in credit availability as NBFCs face credit squeeze

India may see fall in credit availability as NBFCs face credit squeeze:Moody's


Why in News?

India faces a potential sharp slowdown in credit availability as non-bank financial institutions face a possible credit squeeze even as the asset quality is stabilising.

Highlights:


  • In India, an ample foreign exchange reserves buffer and very low external debt levels help provide greater resilience to economic shocks, including from potentially higher oil prices.
  • India also faces a potential sharp slowdown in credit availability as non-bank financial institutions face a possible credit squeeze.
  • While the asset quality cycle is stabilising following massive recognition of problem loans and their gradual resolution and provisioning.
  • The recent default of IL&FS, a large infrastructure company, and the subsequent liquidity stress in the capital market, has created an emerging risk for banks in the country.



















India may see fall in credit availability as NBFCs face credit squeeze India may see fall in credit availability as NBFCs face credit squeeze Reviewed by The Hindu Current Affairs on November 17, 2018 Rating: 5

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