CONNECT WITH US
Fintech

Fintech

Bank credit growth to NBFCs hits 81-month high as shadow banks tank up for festive season

ET BFSI Fintech logo

Published on

Add as a preferred source on Google
Bank credit growth to NBFCs hits 81-month high as shadow banks tank up for festive season

Bank credit growth to NBFCs hits 81-month high as shadow banks tank up for festive season

Banks added Rs 6.6 lakh crore of credit to NBFCs over the past year, around 1.5 times the Rs 4.4 lakh crore added in the previous three years combined. NBFCs now account for 9.8% of gross bank credit, up from 8.3% a year earlier.

Banks added Rs 6.6 lakh crore of NBFC exposure in a year, 1.5 times the addition in the previous three years combined. NBFCs accounted for 18% of incremental non-food bank credit, up from 3% a year earlier. NBFCs now account for nearly a third of bank credit to the services sector and almost half of incremental services lending.

Festive-season funding needs and higher bond-market borrowing costs have driven the shift towards bank loans, though growth may moderate as front-loaded borrowing normalises. 5 lakh crore as of September 30, 2026, its fastest annual growth since December 2019. The sharp increase reflects NBFCs' growing reliance on bank loans as bond-market borrowing becomes more expensive. Festive-season funding requirements and borrowings advanced ahead of the October rate hike have also contributed to the surge. 4 lakh crore added in the previous three years combined. 3% a year earlier. 9% for overall bank credit, according to CareEdge Ratings.



Source link
Related Topics:Fintech

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We TheMorningPulse.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It's possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.