Outstanding credit — loans, bonds and commercial papers (CPs) — grew 14.6 per cent year-on-year (y-o-y) between September 30, 2016 and September 30, 2017. In the period between September 30, 2016 and September, 30, 2015, the growth had been lower at 13.8 per cent.
With banks increasingly participating in the bond markets, the share of bonds in total credit is rising.
Meanwhile, the growth in non-food credit in the fortnight to September 29, 2017, was slightly lower at 13.6 per cent y-o-y.
The outstanding loans (non-food credit) from banks to industry and individuals stood at Rs 80.09 lakh crore at the end of September 2017, according to data from the Reserve Bank of India (RBI).
The net corporate bonds outstanding, as at the end of September, was Rs 25.87 lakh crore, up 18 per cent from Rs 21.95 lakh crore in September 2016, as per latest data released by the Securities and Exchange Board of India (Sebi).
Data from RBI showed that the net outstanding on commercial papers stood at Rs 3.93 lakh crore as of September 30, up 12.6 per cent from Rs 3.49 lakh crore in the previous year.
Higher-rated corporates have in recent days chosen to borrow from the markets rather than from banks as the former route has turned out to be cheaper.
Bankers and sector analysts have in recent days made a case for measuring credit growth in terms of outstandings on loans as well as bonds as better-rated corporates are borrowing increasingly from the money markets.
Speaking after State Bank of India’s (SBI) June quarter results, managing director B Sriram had said that between June 2016 and June 2017, around Rs 40,000 crore had moved from the bank’s loan book to the markets.
“A large portion of it — about 70 per cent of it — is in the CPs, or commercial papers. These commercial papers swing between the loan book and the markets, depending on the price, availability, etc,” he said. FE