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.

Indian billionaire Ajay Piramal’s home finance firm is set to tap overseas markets for funds, as hurdles mount for such non-bank lenders to raise money at home after landmark defaults by IL&FS group, Bloomberg News reported. The tycoon’s Piramal Capital & Housing Finance, which provides services including mortgages to individuals and real estate financing, is firming up plans to raise "sufficient capital" through external commercial borrowings and bond markets.

In a sign of a mounting policy struggle between India’s central bank and the government of Prime Minister Narendra Modi, a top bank official warned on Friday that undermining a central bank’s independence could be “potentially catastrophic,” Reuters reported. The comments by Reserve Bank of India (RBI) Deputy Governor Viral Acharya showed that the central bank is pushing back hard against government pressure to relax its policies and reduce its powers ahead of a general election due by next May, and as Indian financial markets have been dropping in recent weeks.

Creditors of India’s bankrupt Essar Steel have accepted an offer from ArcelorMittal, the global steel giant said on Friday, in a major step towards its efforts to establish a meaningful presence in India, the Financial Times reported. The announcement came a day after Essar’s founding Ruia family offered to pay off the company’s entire outstanding debt of Rs543bn ($7.4bn), in a last-ditch attempt to pull the company out of the insolvency proceedings and halt the sale by creditors.

India’s second-oldest mutual fund has grown wary on non-banking financial companies after landmark defaults by IL&FS group fueled a cash crunch in the sector, Bloomberg News reported. Canara Robeco Asset Management is exercising caution on investments in short-term debt issued by NBFCs, as the fallout from Infrastructure Leasing & Financial Services Ltd. adds to strains caused by asset-liability mismatches. The company is a joint venture between Canara Bank and Netherlands-based asset manager Robeco.

India’s tight money conditions and fears of a contagion following a debt crisis at a local lender dented demand and put a muzzle on animal spirits in the world’s fastest-growing major economy, Bloomberg News reported. Economic growth in the July-September quarter may have retreated from the 8 percent plus expansion in the three months ended June as consumption cooled, a slew of high-frequency data show.

ScS Group said on Thursday it would stop selling its sofas and carpets at House of Fraser stores from January, saying the partnership had ceased to be beneficial since billionaire Mike Ashley bought the collapsed department store group, Reuters reported. Sports Direct, the British sportswear retailer controlled by Ashley, snapped up House of Fraser and its 58 stores from administrators for 90 million pounds ($116 million) in August.

Essar Steel India Ltd said its board and shareholders have offered to pay 543.89 billion rupees ($7.42 billion) to creditors to settle their claims, allowing the company to exit from a bankruptcy process, Reuters reported. The steelmaker, owned by the billionaire Ruia brothers, is one of a group of companies that are among India’s biggest debt defaulters that were pushed into the bankruptcy court last year after a central bank order that was aimed at clearing record bad loans at the country’s banks.