Non-food credit growth continued to remain in single digit, at 9.94% as on fortnight ended November 27, compared to the same period last year, according to RBI data.
Outstanding loans in the banking system stood at Rs 67.58 lakh crore as on November 27 compared to Rs 67.29 lakh crore in the previous fortnight — a rise of Rs 29,745 crore. Although the credit offtake is seeing some improvement over the last two fortnights, it has shrunk since the beginning of this fiscal. Since early April, the non-food credit growth has shrunk by 0.04% with the outstanding amount seeing a reduction of Rs 2,742 crore.
A large part of this shrinkage in the banking system can be attributed to the lack of corporate credit offtake. Banks have been depending on retail and SME segments to grow their loan books.
And whatever little credit growth can be seen in the corporate segment has mostly shifted to the corporate bond market. Between April and November, firms have mopped up close to Rs 2.86 lakh crore through the corporate bond market, indicating a shift from bank borrowing. At present, a AAA-rated public sector unit can issue
ten-year bonds at a yield close to 8.25%.