look news india
Banks will raise Rs 1.3 lakh crore by issuing bonds in FY25 due to slow deposit growth, a report by domestic rating agency ICRA said. Amid a persistent gap between deposit and loan growth, bond issuance will be between Rs 1.2-1.3 lakh crore and will be the highest ever for the system, the report said. Nearly 85 per cent of bond issuers will be state-owned banks, a report by local rating agency ICRA said, according to PTI news.
Banks have raised this amount in the financial year 2024
Greater interest for infra bonds among such lenders will drive the market further. The agency said tight liquidity conditions and credit growth outpacing deposit growth have created a need for banks to raise funds from alternative sources. Banks raised Rs 1 lakh crore through bond issues in FY24 as against the previous all-time high of Rs 1.1 lakh crore in FY23.
Banks have so far raised Rs 76,700 crore from bonds
The report said that as the middle of the financial year approaches, banks have raised Rs 76,700 crore so far from bonds, which is 225 per cent more than the resources raised during the same period in FY24. While private banks are focusing on reducing their loan-to-deposit ratio, public sector banks have dominated in raising funds through bonds this year, the agency said.
Advance estimates of banks till June 30, 2024
Ratings head Sachin Sachdeva said raising funds from bonds will reduce the CD ratio for private sector banks, while public sector banks will continue to drive growth through infrastructure bonds as there is ample scope available. It said banks' advances to the infrastructure sector are estimated at Rs 13-14 lakh crore by June 30, 2024, with public sector banks accounting for about 75 per cent.