Asia Pacific

Bank, NBFC Tie-Ups Create a Path to Sustainability in India’s Financial Sector

A default in September 2018 at infrastructure conglomerate and non-bank lender IL&FS cascaded across India’s financial sector in ways that are still being felt today, cutting off many non-bank financial companies – which account for more than a quarter of India’s domestic lending – from wholesale funding markets, and putting the brakes on the segment’s hitherto remarkable growth. Linking up with their conventional banking peers could help NBFCs address their structural dependence on wholesale funding and improve the quality of banks’ assets.