Bank lending to NBFCs jumps 23.6% in July to Rs 13.8 trillion: Report

Banks’ credit exposure to non-banking financial companies rose 23.6 per cent on-year to Rs 13.8 lakh crore in July, pushing up their overall share to 9.3 per cent during the month, an analysis of the RBI’s monthly data by a ratings agency showed.
The month also saw lower borrowings from international markets due to the prevailing elevated global interest rates following tightening of monetary policies by global central banks, according to a note by Care Edge.
There has been a consistent upward trend in bank credit to NBFCs in the second half of FY22, coinciding with the phased reopening of the economy after the pandemic. The growth momentum further accelerated during FY23 and in the first quarter of FY24.
However, NBFCs’ overall borrowings on a month-on-month basis declined 3.3 per cent, primarily due to the merger of HDFC with its subsidiary HDFC Bank from July 1, Care Edge said.
Mutual funds’ debt exposure to NBFCs, including Commercial Papers (CPs) and corporate debt, jumped 60.