He said there has also been an increased demand for working capital loans as well as higher opportunities to invest in new capacity.
reserve Bank of India The data showed that bank loans taken by large corporations grew by 3.3% year-on-year in June, the highest growth since the outbreak of Covid-19. In the same period last year, large corporate loans declined by 3.4% compared to a year ago.
“Not only is the demand for credit increasing, customers, especially large corporates, are turning to banks for their credit requirement, as opposed to other forms of borrowing,” said the managing director. Shyam Srinivasan Told. “This has been happening for the last six/seven months. And that’s one of the reasons why credit is growing so fast.”
Bank credit registered a year-on-year growth of 14.5% at the end of July, supported by demand from large and medium corporations. Large corporate loans rose by Rs 76464 crore to Rs 23.93 lakh crore in the last one year, while medium-sized corporate loans increased by Rs 71115 crore to Rs 2.21 lakh crore, according to the latest data released. reserve Bank of India has shown.
There is increasing demand for loans from big corporations, said
Managing Director LV PRABHAKAR. “Bank credit has become competitive for large borrowers, given the tightening of rates in the credit market,” he said.
“In the rising interest rate scenario, corporates are looking for long-term borrowings instead of short-term loans and this has helped banks improve credit growth,”
As Managing Director Rajeev.
Federal Bank’s Srinivasan explained that there are other issues that are driving the corporate credit demand. “Capacity utilization has started coming down, which means there is a need for corporates to top up. That’s why people are looking at reinvestment options. There is also a natural inflation-led growth. Again, we’re operating on a reasonably low basis. All these are creating a fair amount of credit momentum and banks having clean balance sheets and risk appetite have been able to meet this,” he said.
This is in line with rising factory output, which grew 12.7% year-on-year in the June quarter. The power and manufacturing sectors recorded annual growth of 16.4% and 12.5%, respectively, in June. The mining sector grew by 7.5% in the same period. India Ratings and Research said, “Despite global adverse conditions and uncertainties, this double digit is a sign of industrial recovery.”