Emerging alarming trends in India's financial sector

The onset of the new financial year FY25, commencing on April 1, 2024, does not promise any relief from the economic challenges persisting since the previous fiscal year. In recent months, various banks and financial institutions in India, including Bank of Baroda, HDFC Bank, Kotak Mahindra Bank, PayTM, IIFL, JM Financial, and Paisa Lo, have been making headlines for all the wrong reasons.

- Dr. Rajiv Khosla

Surprisingly, this roster encompasses both public and private banks, as well as Non-Banking Financial Companies (NBFCs) and Fintech firms, representing the entire spectrum of the financial sector. This should prompt policymakers and analysts to reflect on whether the emerging trends in India’s financial sector are moving in a positive direction or posing serious risks. While individual banks (both public and private), NBFCs, and Fintech companies are grappling with their respective challenges, collectively they signal looming financial threats for the Indian economy and its citizens.