The share of large borrowers in gross advances of scheduled commercial banks (SCBs) declined successively over the past three years, even as retail loans grew faster than borrowings by corporates, according to the Financial Stability Report.
The share of large borrowers in SCBs gross advances reduced from 51.1 per cent in March 2020 to 46.4 per cent in March 2023.
A large borrower is defined as an entity having aggregate fund-based and non-fund-based exposure of ₹ five crore and above.
Share of borrowers
Within the large borrowers’ cohort, however, big corporates increased their recourse to bank financing; the share of the top 100 borrowers in total credit has been rising since September 2021.
The share of the top 100 borrowers in total credit has increased from 16.6 per cent in September 2021 to 17.2 per cent in March 2023 against the backdrop of improved credit quality.
The share of the top 100 borrowers in SCBs total gross non-performing assets (GNPAs) declined to 1.6 per cent in March 2023 from 5.7 per cent in September 2021, per the FSR.
FSR reflects the collective assessment of the Sub Committee of the Financial Stability and Development Council on prevailing and emerging vulnerabilities in the Indian financial system.
Retail loans grew at a compounded annual growth rate (CAGR) of 24.8 per cent from March 2021 to March 2023, almost double the CAGR of 13.8 per cent for gross advances during the same period, per the report.
These loans formed around one-third of the total banking system’s gross loans and advances.
The share of large borrowers in the GNPAs of SCBs came down substantially (from 75.7 per cent in March 2020 to 53.9 per cent in March 2023), the report said.
Asset quality in the large borrower portfolio saw significant improvement: the GNPA ratio declined from 12.2 per cent to 4.5 per cent over this period.