Corporate lending has remained soft throughout India in H1 due to disruptions related to the monsoon, uncertainty in global trade, and delayed project starts. With increasing policy momentum and clarity on business, are positioning for revival.
Several factors contribute to SBI’s optimism. Reforms by the Reserve Bank of India, including liberalisation of external borrowings and efforts to deepen credit supply, have created a propitious environment.
The rollout of the new phase of the by the government is expected to trigger investment and capital expenditure by corporates, lifting credit offtake. Infrastructure and capital projects, which have been stalled or delayed, are now inching towards execution, triggering fresh demand for bank credit.
As one senior executive at a corporate group noted, lending to corporates is expected to pick up in the second half, as spending on infrastructure was low due to the monsoon, but is anticipated to rise.
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