India’s risk-averse lenders are emerging to its recovery
India’s risk-averse lenders are becoming one of the biggest hurdles in the process of a speedy recovery of the nation from the pandemic induced downturn, as they keep the credit to themselves when the economy is in the need of it the most.
The RBI data says that loans for companies and individuals have been growing at an increasing rate of 5.5%-6% in recent past months, which is half the speed that was observed before the pandemic struck.
The nation’s biggest lender, SBI wishes to double their credit growth up to 10% in the year started by April 1, however, they are willing to give up on this goal.
It does not help in any case as India is home to one of the biggest piles of soured loans among other major economies. According to the Centre for Monitoring Indian Economy Pvt., there is a low willingness by the corporate for investments along with the declining of capital expenditure.
Companies have shown bumper profits, all on the back of widespread cost-cutting, many of them have used extra funds to pay back bank loans.