Outstanding credit — loans, bonds and commercial paper — grew 9.4% year-on-year (y-o-y) between June 30, 2016 and June 2017. In the corresponding period between June 30, 2016 and June, 30, 2015, the growth had been higher at 11%. 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 year to June 23, 2017 was slightly lower at 6.7% y-o-y. Outstanding loans (non-food credit) from banks to industry and individuals stood at Rs 76.06 lakh crore at the end of June 23, data from the Reserve Bank of India (RBI) showed.
The net corporate bonds outstanding, as at the end of June, was Rs 24.81 lakh crore, up 20% from Rs 20.63 lakh crore in June 2016, as per the latest data released by Sebi. Data from the RBI showed that the net outstanding on commercial papers stood at Rs 3.88 lakh crore as of June 15, little changed from Rs 3.83 lakh crore in the previous year. Outstanding non-food bank credit grew 6.7% y-o-y to Rs 76.06 lakh crore as on June 23.
In a recent statement, ratings agency ICRA said that between FY11 and FY17, the Indian debt capital markets grew at a compounded annual growth rate (CAGR) of 17% in terms of issuance volumes and 18% in terms of outstanding volumes.
Bankers and sector analysts have in recent days made a case for measuring the credit growth in terms of outstanding on loans as well as bonds as better-rated corporates are borrowing increasingly from the money markets.
In March, HDFC Bank deputy managing director Paresh Sukthankar had told FE, “A large amount of shorter-end commercial paper borrowers are all banks. So effectively, when you are looking at credit growth, you should go back to what we called ‘customer assets’, which we used to look at before we went back to loans and advances because it had died a sort of natural death.”
Speaking after State Bank of India’s (SBI) December quarter results, chairman Arundhati Bhattacharya had said, “There is movement of the better-rated corporates from the loan book into the money markets and into the bond markets and, therefore, these numbers give a flavour where our money is getting invested.”