RBI unlikely to give shadow banks bad-loan exemptions

RBI is unlikely to give “shadow banks” exemptions from stricter bad-loan rules coming into force, sources told, essentially ending an advantage the non-bank financial firms have had over standard banks.

Non-banking financial companies (NBFCs) have asked the Reserve Bank of India to exempt smaller loans from the rules taking effect next month that are in line with those covering banks.

India had 10,000 shadow banks as of March 2021, the latest RBI data available, with assets of 54 trillion rupees ($680 billion) or about one-fourth that of the banking sector. Several of the biggest shadow banks are listed on the stock exchanges.