- The government is keen to revive credit growth and spur Asia’s third-largest economy, which expanded at the slowest pace in six years in the quarter to September 30
Prime Minister Narendra Modi’s government is considering easing lending rules for shadow banks, according to people familiar with the matter, a move that would give the cash-starved financiers access to funds.
Modi’s cabinet is likely to discuss allowing state banks to provide so-called credit enhancement against securities rated BBB+ to non bank financiers, the people said, asking not to be identified before a public announcement. That’s the fifth level below what’s permitted under the current plan.
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The government is keen to revive credit growth and spur Asia’s third-largest economy, which expanded at the slowest pace in six years in the quarter to Sept. 30. More than a year after the collapse of Infrastructure Leasing & Financial Services Ltd., shadow lenders have been reeling from a cash shortage that’s hurt expansion plans and stalled trade finance at small to medium-sized companies.