Shadow banks in the spotlight

After spending years in the background amid the well-documented struggles of state-owned banks, India’s “shadow” banking sector has been thrust into the spotlight over the past week following news that a local lender will miss several debt repayments this year. The macroeconomic risks emanating from strains in the shadow banking sector should be manageable, but the events of the past week serve as another stark reminder that the government still has plenty of work to do to fix India’s financial sector.