Survey investigates the key drivers of Rollover Risk of the shadow banking system in India in light of the current liquidity crunch in the sector.
Key drivers of Rollover Risk:
Asset Liability Management (ALM) Risk.
Interconnectedness Risk.
Financial and Operating Resilience of an NBFC.
Over-dependence on short-term wholesale funding.
Survey computes a diagnostic (Health Score) by quantifying the Rollover risk for a sample of HFCs and Retail-NBFCs (which are representative of their respective sectors).
The analysis of the Health Score has the following findings:
The HFC sector exhibited a declining trend post 2014 and overall health of the sector worsened considerably by the end of FY2019.
