Credit to larger corporations increased by 1 % in May compared to 7.1 % a year ago. Even the home loan increased by 9% compared to 38.7% a year ago, showed reserve Bank of IndiaLatest data on sectoral deployment of bank credit (RBI).
Both these sections include 31% of the non-food credit portfolio of the banking sector alone by ₹ 183 lakh crore by the end of May.
The loan to NBFC has failed to take even after the Reserve Bank withdraws high -risk weight on them. A year ago, the loan to NBFCs was contracted 0.3 % compared to the 16 % increase in the same period.
Experts credit this trend by raising cheap funds from the bond market for prior payment of some high cost loan and through commercial papers. Anil Gupta, senior vice-president and co-head of the financial sector rating in the rating firm, said, “Many big firms have high cost loans by raising funds directly from the market through bonds and commercial paper.” Letter “Furthermore, the possibility of an increase of 7.1 % last year is an external because the increase in debt was then supported by tax laws, which allows limited income tax deduction at some expenditure. The recession in the current year is likely to be an outsider.”
According to a report by rating firm Crisil, low interest rates will benefit, the possible impact of the corporate bond market that replaces bank loans for rapidly pricing by high-rated borrowers by high-rated borrowers.
As a recession in domestic debts, the borrowers waited for the rates to go under the rates as an easy cycle starting in February. Gupta said, “But after the loan 50 BPS (a BPS 0.01 %), the Central Bank can cut the cut by the Central Bank in June, as the simultaneous change in the stance from adjustment to the neutral adds confidence to the lenders that the debt will be limited and downwards,” Gupta said. Gold loans or loans against gold jewelery and renewable energy remained the only outlair, where development has exceeded one year. They rose 115% and 106%, by the end of May, respectively, RBI data showed.
