Despite rising borrowing rates, NBFCs push credit demand by 14.4% to its highest level in five years


NBFC pushes credit demand by 14.4% to its highest level in five years

Despite the overall rise in lending rates, bank lending rose 14.41 percent in the second half of October, for the first time in more than five years, the Reserve Bank announced.

This growth reached its highest level in five years, after the 16.6% achieved by the system in October 2013 and the data that comes, while information indicates an increase in the demand of finance companies nonbanks in difficulty (NBFC) with banks. NBFCs face liquidity pressure and repayment of approximately 60,000 crores of silver between 1 and 9 November.

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Another repayment of 90,000 crore at the end of the month, on an amount of 70,000 crore, corresponds to a redemption of commercial paper. Preliminary figures released by the central bank show that global bank credit rose 14.41 percent to 26.01 billion rupees as of October 26, compared with 81.29 billion rupees the previous year. Bank credit increased by 4.45% for the two weeks to October 12, according to the data.

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According to reports, finance companies in the banking sector are struggling to obtain short-term money market financing and are turning more and more to banks for their commitments. Money markets were affected by the failures of IL & FS. In addition, analysts believe that NBFC's liquidity problems offer banks an opportunity to regain their market share by lending directly to the segments served by shadow banks. A large number of banks, starting with the largest SBI lender, have shown greater confidence in credit growth for the current fiscal year in a recent comment from management.

The growth of the system deposits reached 120.71 billion rupees, or 8.83%, a slight decrease compared to the previous fortnight of October 12th, when it stood at 120.87 billion rupees, announced the RBI.

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