‘Corp credit rise may be temporary’
MUMBAI: Even as major banks are revising upward their projections for corporate credit growth, rating agency Icra has said that corporate lending is yet to see a meaningful revival. “Corporate credit is very difficult to call out, whether it will go up or not. There appears to be some uptake in the second quarter. Whether this sustains or not will depend on multiple factors,” said Ajay Gupta, senior VP, Icra. He said the spike in demand in Oct could be temporary, as corporates might be borrowing from banks in anticipation of a rate cut before locking into bonds. The easing of external commercial borrowing (ECB) norms by the RBI and lower global interest rates could also prompt corporates to look overseas for funding. Earlier this month, SBI chairman C S Setty said the bank had raised its corporate credit growth target to 10% from single-digit growth earlier, with a Rs 7 lakh crore loan pipeline. It expects overall credit growth of 12-14%. Bank of Baroda too projected 10-11% growth in corporate credit and 11-13% growth in total lending. Icra has marginally revised its outlook for overall bank credit growth to 10.7-11.5%, from its earlier estimate of 10.3-11.4%, citing the boost from GST cuts and liquidity support through the CRR reduction. In latest update, Icra said it had increased its projection for credit expansion in FY26 to Rs 19.5-21 lakh crore, up by Rs 0.5 lakh crore from the earlier estimate. “H1 FY2026 has seen incremental credit offtake of Rs 10.1 lakh crore, with a sizeable expansion in Sept,” said Sachin Sachdeva, V-P and sector head, Icra.
