Bank credit It grew by 16.2 per cent during the fortnight ended September 9, more than double the pace of 6.7 per cent in the same period last year as corporate demand continues to rise and tighter market rates to meet their funding requirements. Going back to the banks.

Bank credit grew by 16.2 per cent to Rs 125.5 lakh crore as on September 9’22 from last year’s level. This is the highest growth in more than eight years and is projected to more than double the growth rate of 6. per cent in September’21.

Analysts attribute this to a steady growth in retail and MSME loans, apart from an increase in corporate demand. “Notably, with the overall capacity utilization level at 75% (as of June 2022) and a tighter global monetary scenario, banks are facing renewed demand from corporates – primarily for increased working capital requirements. , which was recently met by foreign borrowing or corporate bond market” Tanvi Gupta Jain said, UBS India Economist, “It was also supported by the banks’ better willingness to lend”.

India Rating It has revised its banking credit growth forecast for FY23 to 13.0% per annum from 10.0 per cent. Factors driving this upward correction include increase in working capital demand, even as capex is likely to see some moderation, given the build-up in macro uncertainties. Also with the unfavorable interest rate cycle, the banking system is seeing a shift from capital markets to long-term financing. Besides, the revival in credit demand from the corporate segment is better than expected, especially in sectors like infrastructure and chemicals, the rating firm said.

From the lenders’ point of view, asset quality concerns are easing. Gross Non-Performing Assets (GNPAAccording to India Ratings, the banking system’s ratio declined to 6.1 per cent in FY22 from 11.2 per cent in FY18.