Infrastructure financing challenges: DHFL crisis

Abstract

According to a report by The Financial Stability Board, in 2016, out of $340 trillion global financial assets, $45 trillion accounts for Shadow banking assets. This brings alarming risks to financial stability since these products and practices operate outside the regular banking system with fewer regulations. India ranks 6th among the G-20 economies concerning the size of shadow banking, which consists of NBFCs & HFCs. NBFCs in India perform many vital roles, like providing credit to inaccessible areas such as niche sectors and small industries. In India 99.7% of shadow banking operates by taking long-term loans against short-term funding.