Over the past week, IndusInd Bank Ltd. witnessed almost one-fifth of its market value wiped out due to concerns about its creditors. On Friday, the bank said that the confidence crisis in the financial system of India is now fading away.
IndusInd bank’s outstanding loans to overstretched borrowers dipped last quarter. The bank is planning to resolve the default of its borrowers, and the authorities are also taking steps to prohibit future financial delinquencies at shadow banks.
Romesh Sobti, Chief Executive Officer of the IndusInd Bank, said, “All we need now to turn the tide of caution completely is a resolution of a large delinquent account.” He added, “Banks are already beginning to look more positively at lending to non-bank financiers and the real estate segment as the worst is behind us.”
Joining Edelweiss Financial Services Ltd. and Axis Bank Ltd., IndusInd also believes that the slump in the Indian finance sector is going to end soon.
Since the IL&FS Ltd. (Infrastructure Leasing & Financial Services Ltd.) crisis, most of the banks in India have witnessed slowdown for more than a year. Default by some of the other shadow landers worsened the situation of the financial sector.
20% of the shares of the IndusInd Bank wiped out amid speculations that Indiabulls owed money to the bank. Almost a year ago, Yes Bank Ltd. had to complain to the police on spreading the rumours and fake news about the financial health of the bank, the bank lost more than 80% of its shares.
IL&FS had already spoken of getting rid of its debt obligation by March 2020. Speaking on the future of the Indian financial sector Sobti said, “The elephant has passed through, though the tail is still wagging.”
Trust is the key to success in the opinion of several prominent experts in the financial sector, which many believe is missing. While earlier, the lack of confidence was visible in the market, the past quarter has surprisingly witnessed an increase in the confidence of sentiments amongst the market players.