Companies increasingly looking to raise funds from market, while banks focus more on personal loans. Reasons for shift include NPA crisis & higher trust among households, say experts.
A major point of discussion surrounding private sector investment is whether it has been slowing down because banks aren’t lending to companies. While it may be true that corporate loans are no longer a focus area for banks, data shows that corporates are increasingly looking beyond banks to raise their funds, perhaps pointing towards a changing role for banks in the economy.
Data from the Economic Outlook database of the Centre for Monitoring Indian Economy (CMIE) shared with ThePrint showed that even as recently as 2009-10, banks and other financial institutions provided as much as 58.5 per cent of the funds corporates raised for their investments. By 2021-22, this proportion fell to 32 per cent.
TCA Sharad Raghavan 