Hike in corporate loan demand on fresh capital building
There is a clear turnaround in fresh capital investment by corporates with bank loan demand being led by infrastructure, roads, renewable energy, and oil sectors.While in the last few quarters, loan demand was led by higher utilisation of working capital due to increase in commodity prices, from the September quarter onwards corporate loan growth has trended towards fresh capacity building.
According to data with the RBI, credit to the industry rose by 12.6% in September 2022 compared with 1.7% growth a year earlier. Notably, credit to large industry accelerated to 7.9% against a contraction of 2.1% in September 2021.
Bankers expect corporate loans to pick further momentum in the remaining two quarters of this fiscal year.According to SBI chairman Dinesh Khara, there is an improvement in capacity utilisation and the kind of demand we have seen on the ground gives us confidence.According to various bankers opinion the revival in consumer demand (and) rise in private capex, followed by rise in government spending, can be triggers for industry credit growth and these could turn out to be key catalysts for overall credit growth revival.
Liquidity surplus in banking system in the month of November
The liquidity in the banking system has turned to a surplus in November as the demand for cash seen during the festive season tapers and also on likely increase in government spending.
During the first three days of the month, the RBI absorbed a daily average of Rs 71,090 crore from the banking system.Compared to what we were seeing in October, that (liquidity) tightness was expected to kind of abate in November because the high currency demand during the festive season would have gone and also with the expectation that the government spending will increase and that will improve the liquidity situation,” Care Ratings chief economist Rajani Sinha.
National Payments Corporation of India (NPCI) has announced the launch of the BHIM App open-source license model. Under the new model, the source code of the BHIM app will be licensed to regulated entities participating in the UPI ecosystem.
Further, new features that get launched on BHIM App in the future, will also be extended to these entities for them to continue. BHIM licensing model will empower these entities to offer the benefits of UPI to their customers with a ready UPI application that will help reduce time, effort, and costs for the entities.
