Non-Banking Financial Companies Seek Loans from Banks Amid High Bond Yields
NBFCs return to banks for loans as bond yields stay elevated
Business Standard
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Non-banking financial companies (NBFCs) in India are increasingly turning to banks for loans, with bank credit to these institutions rising 26.3% year-on-year to ₹20.65 trillion as of March 2026. This shift is largely due to elevated corporate bond yields and improved banking liquidity.
- 01Bank credit to NBFCs increased by 26.3% year-on-year.
- 02Total bank credit to NBFCs reached ₹20.65 trillion in March 2026.
- 03This marks a significant rise compared to 7.4% growth in the previous year.
- 04The shift is driven by high corporate bond yields.
- 05Regulatory easing and improved banking liquidity have supported this trend.
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As of March 2026, bank credit to non-banking financial companies (NBFCs) in India surged by 26.3% year-on-year, reaching ₹20.65 trillion. This increase reflects a strategic shift by shadow lenders towards traditional banks for funding due to persistently high corporate bond yields. In contrast, the previous year saw a modest growth of 7.4%, with the outstanding credit portfolio at ₹16.35 trillion. The rise in bank credit is bolstered by regulatory easing and enhanced liquidity in the banking sector, making it a favorable environment for NBFCs to seek loans.
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This trend indicates that NBFCs may have more access to funding, which could lead to increased lending to consumers and businesses, benefiting the overall economy.
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