Growth Trajectory of Shadow Banking in India – Concerns and Prospects
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Abstract
A sound financial system is a pre-requisite for inclusive as well as sustainable growth of the economy. The Indian financial system is dominated by the banking sector. Apart from the banking institutions, another integral part of the financial system is Non Banking Financial Companies (NBFCs). The functions of such institutions are supplementary to the banking functions except certain ways. Consequently, NBFCs are being globally recognised as shadow banks. In India, NBFCs are referred to the shadow banks as they possess a significant role and place in the Indian economy since independence like banks. However, the developments both at national and international levels have augmented the impact and growth of the shadow banking all over the world and in India, particularly during the last decade. In this perspective, the present focuses on the growth trends, issues of concerns and prospects of shadow banking in India and concludes with the implications therefrom.
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