• Monday, August 15, 2022

Business

India Took Control of Ailing Shadow Banking Firm IL&FS to Avert Catastrophic Damage

India Took Control of Ailing Shadow Banking Firm IL&FS to Avert Catastrophic Damage (REUTERS/Francis Mascarenhas/File Photo).

By: Radhakrishna N S

The Indian government said it was forced to take control of ailing shadow banking firm Infrastructure Leasing & Financial Services (IL&FS) as it feared its collapse would cause “catastrophic” damage to the financial markets and the economy, a court filing shows. In the largest intervention of its kind, India this week replaced the board at IL&FS, a construction and infrastructure firm that had defaulted on a series of repayments to creditors as it struggled under a debt pile of more than $12 billion. The company’s downfall has undermined confidence in India’s shadow banking sector, triggered declines in the nation’s stock…

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