RBI supplies liquidity to Indian shadow banks ‘to avoid systemic risk’

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India’s central bank has started providing liquidity to the country’s embattled shadow banking sector to avoid systemic risk, it announced on July 1.

The news is the latest sign that India’s finance sector, including both banks and non-bank financial firms, is coming under severe strain.

The government authorised the Reserve Bank of India to set up a special purpose vehicle (SPV) “to avoid any potential systemic risks to the financial sector”. The SPV has been established by the state-owned

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