MUMBAI - India might have thought the worst of a bad loans crisis was past, but a severe cash crunch in the real estate industry could augur fresh strife for its banks.
With about $10 billion of development loans coming up for repayment in the first half of 2020, according to Fitch Rating’s Indian division, the fallout could spread to mainstream banks that have lent money to the shadow lenders or invested in their bonds. Potential implosions of these NBFCs could expose banks, according to 12 banking and real estate sources.
“The project has been stuck and there is no progress at all. Even the bankruptcy court has not been able to resolve the issue so far, it is just hanging in thin air,” Mitroo said. He did not say how much money he had paid, but properties in that project range from about $56,000 to $140,000. Defaults by two housing finance companies, Dewan Housing Finance Corp and Altico Capital, have increased fears of contagion to the banking system..Shadow lenders will be highly exposed when loans worth roughly 700 billion rupees come up for repayment in the first half of 2020, as many builders may struggle to repay, Fitch’s India Ratings said last month.
The Nifty Bank index , which surged in late September after the government moved to slash corporate tax rates, gave up more than half those gains as of Friday. Concerns about real estate loans were one factor, according to analysts, but the fall was also driven by low growth in the economy and the overall worsening asset quality of certain lenders.
Nupursays SwatiBhat22 Seems in India so far some business were being run with bank's money. Their mansions, big cars, flashy lifestyles were being met by bank loans. The bad loans were being replenished with taxpayers money. Now that had been stopped market is nose diving.
Nupursays SwatiBhat22 Where in India 🇮🇳 is that?
Nupursays SwatiBhat22 If all world leaders were to expose their finances, would people really start to wake up? Keep up the great job...and smile.
Nupursays SwatiBhat22 Conglomerates of Cans, not houses
Be Brexit fault
Is this when WE bail them out again.
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