Slow growth of deposits in banks, plan to raise 1.3 lakh crores from bonds; SBI chief said this on loans

Banks will now have to raise money from other ways due to slow deposit growth. Rating agency ICRA believes that in the current financial year, banks will have to raise Rs 1.3 lakh crore by issuing bonds. The amount to be raised thru bonds will be the highest amount ever. The ongoing gap between deposit and loan growth has to be reduced.

In a report published on Tuesday, ICRA said about 85 percent of the bonds will be issued by government banks. These bonds will be from the infrastructure sector. Due to the dire liquidity situation and loan growth continuously exceeding the deposit growth, it has become necessary for the banks to raise funds from alternative sources. Banks have raised Rs 1 lakh crore from bonds in 2023-24. This is against an earlier all-time high collection of Rs 1.1 lakh crore in 2022-23.

So far, banks have mobilised Rs 76,700 crore from bonds in the current fiscals. This is significantly higher than the amount they mobilised in the corresponding period of the financial year 2023-24. Banks' advances in the infrastructure sector are estimated at Rs 13-14 lakh crore as on June 30, 2024. Public sector banks have a 75 percent share in this.

SBI Chairman Challa Srinivasulu Shetty said the bank received a loan demand of Rs 4 lakh crore from the industry. This indicates private sector capital spending will pick up in the second half of 2024-25. The infra is getting funding from roads, renewable energy, and some refineries.