A top Indian government official on Monday said the nation’s non-banking housing finance companies were facing liquidity stress, in comments that are likely to put more pressure on the Indian central bank to ease its policy towards the sector, Reuters reported. The intervention by Corporate Affairs Secretary Injeti Srinivas came after Finance Minister Arun Jaitley and other government officials raised the issue of a liquidity crunch at a meeting with Reserve Bank of India’s (RBI) Governor Urjit Patel and other regulators last week.

India's Department of Economic Affairs (DEA) fears significant default from large non-banking finance companies (NBFC) and housing finance companies in the next six weeks if no additional liquidity support is provided to these firms, business news website MoneyControl said here on Friday, Reuters reported. The DEA, in a letter to the Ministry of Corporate Affairs, described the financial situation as "still fragile" when discussing the financial stability impact of the Infrastructure Leasing and Financial Service Ltd's (IL&FS) default, the website said.

Does the government of Indian Prime Minister Narendra Modi see value in an independent central bank? As New Delhi escalates a confrontation with the Reserve Bank of India, the question has become urgent, The Wall Street Journal reported in a commentary. India risks shredding the reputation of an important financial institution at a time of domestic and global financial uncertainty.

The $12.8 billion bankruptcy of shadow lender Infrastructure Leasing & Financial Services Ltd. is starting to offer a glimmer of hope. It’s about time. Unexpected defaults by the financier, owner and operator of Indian infrastructure assets have caused a liquidity squeeze, which has brought strained relations between the government and the central bank to breaking point, a Bloomberg View reported.

The new board of India’s Infrastructure Leasing and Financial Services (IL&FS) submitted a plan to revive the debt-laden firm to a company law tribunal on Wednesday, paving the way to a potential resolution of the group’s future, Reuters reported. The Indian government this month took control of IL&FS, a major infrastructure financing and development company, after it defaulted on some of its debt, triggering fears of contagion across India’s financial system.

Jet Airways Ltd said on Wednesday it has received notices on payment delays from a few aircraft lessors, adding to the debt-laden airline’s woes, Reuters reported. Profits of airlines in the world’s fastest-growing aviation market have been dented with the surge in crude oil prices and a depreciating rupee. Jet has been struggling to keep itself afloat and it had said in August that it will inject funds and cut costs to turn around the business. Jet said in a statement on Wednesday that it had got notices for payment delays/defaults from few aircraft lessors, but did not elaborate further.

India is examining options including an outright sale of Infrastructure Leasing & Financial Services Ltd., a person with knowledge of the matter said, as the government tries to stem defaults at the lender with $12.6 billion of debt, Bloomberg News reported. A plan to be presented to a bankruptcy court Wednesday by the state-appointed board of the lender includes selling the entire stake to a financially strong investor and ensure business continuity, the person said, asking not to be identified as the matter is private.

Those who are awash in cash lack capital. Those who have adequate capital are thirsty for liquidity, Bloomberg News reported. That, in a nutshell, is the story of India’s financial crunch, and the surest way to ease it will require tapping Indians living overseas. In the past, New Delhi has resorted to such special hard-currency deposit programs to tide over balance-of-payment difficulties. A notable instance was in 1998, after India invited U.S. sanctions by testing a nuclear weapon.

Indian lenders are being punished for their exposure to a shadow lender as the government fails to make good on its promise to halt defaults by the distressed financier, Bloomberg News reported. IndusInd Bank Ltd. has lost more than $1.9 billion of market value since it announced quarterly earnings as net income growth missed expectations and provisions for doubtful loans shot up. Investors also penalized the lender for not detailing all its loans to Infrastructure Leasing and Financial Services Ltd. L&T Finance Holdings Ltd.

Long-simmering discord between the Indian central bank and the government is turning into a very public brawl, a Bloomberg View reported. The timing couldn’t be more awful for markets. In a hard-hitting speech Friday on central-bank independence, Reserve Bank of India Deputy Governor Viral Acharya startled his audience by invoking Argentina of 2010. Back then, the Argentine central bank chief quit after being coerced to hand over a part of its reserves to the government, causing panic in the markets.