Need to monitor 'shadow banking' in India: FSB
The "shadow banking system" refers to credit intermediation involving entities and activities (fully or partially) outside the regular banking system and is estimated to have reached a size of nearly Rs 37 lakh crore in India.
As per a report released today by the Switzerland-based Financial Stability Board (FSB), shadow banking business in India is estimated to be worth over USD 670 billion (nearly Rs 37 lakh crore) and accounts for about one per cent of the worldwide total.
"India and Indonesia stand out with annual growth rates of above 20 per cent since 2007 which may require closer monitoring," FSB said.
The size of global shadow banking system, on a conservative basis, has grown to over USD 67 trillion from close to USD 26 trillion about ten years ago and accounts for nearly half the size of the worldwide financial system.
FSB said these activities provide a valuable alternative to bank funding, if appropriately conducted, but past experience has shown large-scale risks for the economy.
FSB was set up to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the
implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability.
In its report, FSB said that a total of 17 jurisdictions have
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