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12 RGNUL Fin. & Mercantile L. Rev. 250 (2025)
The Contrasting Trajectories of Shadow Banking in India and China

handle is hein.journals/rlfladme12 and id is 265 raw text is: THE CONTRASTING TRAJECTORIES OF SHADOW BANKING IN INDIA AND CHINA - Shantanu Vyas and Anvesha Mishra* ABSTRACT India and China demonstrate contrasting trajectories in their shadow banking industries. India is currently placing significant attention on the launch of Jio Financial Services Ltd., a separate entity derived from Reliance Industries Ltd. This has generated investor optimism, despite an initial decline in stock prices, as indicated by a valuation of $19 billion. The strong performance of Bajaj Finance Ltd. emphasises the significance of India's Non-bank lending sector, surpassing even the State Bank of India in terms of total value. China's shadow banking system emerged as a response to post-financial crisis caution. It involved a complicated network of lending through trusts, focusing on real estate and local governments. Nevertheless, nonbank issuers are currently facing a significant decline in the real estate market, as seen by recent instances of failed payments and apprehensions regarding the potential spread of financial hazards. The shadow banking crisis that occurred in India in 2018 caused a disruption in the availability of credit for the real estate sector. However, the current situation, which is influenced by the increasing digitization of the consumer economy, shows potential for improvement. Jio Financial intends to take advantage of technology in order to benefit from Ambani's extensive business network and deep understanding of consumer behavior. India's regulatory framework appears to be more conducive to the development of domestic industry leaders, in contrast to China's strict regulations. The future of India's shadow banking sector hinges on the adoption of technical advancements, digitalization of consumer services, and effective regulation to ensure sustainable expansion while avoiding systemic concerns. This might potentially lead to a preference for nonbank lenders with advanced technological capabilities, perhaps overshadowing smaller deposit-taking institutions that are government-controlled. I. What Constitutes Shadow B. Continuation of Market View Banking?............................................251 II. Shadow Bank's Mechanism 253 Perspective .............256 A. Market Analysis..............254 C. Financial Viewpoint.........257 * Shantanu Vyas is a fifth-year student at Bennett University and Anvesha Mishra is a fifth- year law student at GGSIPU. Views stated in this paper are personal.