PSBs Lead ₹89,588 Cr Infrastructure Bond Surge to Bridge Credit-Deposit Gap

Speedy Summary

• Banks increased infrastructure bond issuances by 75% in teh current financial year.
• ₹89,588 crore was raised in the first 11 months compared to ₹51,081 crore last year.
• Public sector banks accounted for 90% of these issuances, up from 51% the previous year.
• Private sector banks made up the remaining portion.

Indian Opinion Analysis

The notable rise in infrastructure bond issuances highlights a strategic financial maneuver to address the lag in deposit growth compared to credit growth. Public sector banks taking a dominant share indicates their crucial role and capacity to leverage market resources effectively. The competitive cost of funding through bonds may serve as an impetus for future investment strategies. This trend may reflect a shift towards more sustainable financing methods that align with infrastructure progress goals in India.

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!Representative image | Photo Credit: Getty Images/iStockphoto