Share of large borrowers in gross advances declines for the third successive year: Financial Stability Report

The share of large borrowers in total scheduled commercial bank advances (SCBs) has fallen sequentially over the past three years, even as retail loans grew faster than corporate loans, according to the Financial Stability Report.

The share of major borrowers in total advances provided by the Savings and Credit Bank decreased from 51.1 percent in March 2020 to 46.4 percent in March 2023.

A large borrower is defined as an entity with total fund-based and non-money-based exposure of ₹ five crore and above.

borrowers share

But within a large group of borrowers, large companies have increased their recourse to bank financing; The share of the top 100 borrowers in total credit has increased since September 2021.

The share of the top 100 borrowers in total credit increased from 16.6 percent in September 2021 to 17.2 percent in March 2023 on the back of improved credit quality.

The share of the 100 largest borrowers in total non-performing assets (GNPAs) fell to 1.6 percent in March 2023 from 5.7 percent in September 2021, according to the Financial Stability Report.

FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Board on the prevailing and emerging vulnerabilities in the Indian financial system.

Retail loans grew at a compound annual growth rate (CAGR) of 24.8 percent from March 2021 to March 2023, nearly double the 13.8 percent compound annual growth rate for total advances over the same period, according to the report.

These loans accounted for about a third of the total loans and advances of the banking system.

The share of senior borrowers in the Savings and Credit Bank’s GNPAs decreased significantly (from 75.7 percent in March 2020 to 53.9 percent in March 2023), the report said.

The asset quality of the large borrower’s portfolio has improved significantly: GNPA has fallen from 12.2% to 4.5% over the period.