Corporate Funding Shift Dampens Bank Credit Growth
The State Bank of India (SBI) has projected subdued credit growth for Indian banks. This comes amidst a persistent trend of corporations favouring alternative funding sources.
The report, released on August 2, 2025, highlights the impact of the current low-interest rate environment. Corporates are increasingly exploring options beyond traditional bank loans.
This shift in funding preferences is expected to constrain the overall growth trajectory of bank credit in the coming months. The SBI’s analysis underscores the evolving dynamics of the Indian corporate finance landscape.
The implications are significant for the Indian economy. Reduced bank lending could potentially impact investment and overall economic activity, necessitating a closer look at policy responses.
