Statsguru: Infrastructure financing banks on NBFCs amid lending shift

Recently, Biocon chief Kiran Mazumdar-Shaw met Karnataka’s top leadership to discuss poor infrastructure in Bengaluru. Infrastructure upgradation, in general, is the need of the hour, requiring a huge corpus of funds. However, bottlenecks in infrastructure financing remain as banks reduce their exposure towards such long-gestation lending due to asset-liability mismatch, and specialised infrastructure-financing NBFCs come forward, with an increased lending rate, driving up the cost of 

infrastructure financing. 

The share of outstanding bank credit in infrastructure financing has come down to 33.61 per cent — the least since FY18. 

  Over half of the outstanding bank finance for infrastructure went for the development of power-related infrastructure at the end of FY25. 

 

Between banks and infrastructure-financing non-banking finance companies (NBFC-IFCs), the former’s share in infrastructure financing has come down from 50 per cent at the end of March 2020 to 42 per cent at the end of March 2025. 

 

The share of long-term loans in total outstanding credit by banks has risen to nearly 56 per cent at the end of FY25 — the second highest share in this century. 

 

The share of deposits with a maturity period of up to 3 years with banks has climbed to almost 90 per cent at the end of FY25. 

 

However, the share of non-performing assets in total advances of banks and NBFC-IFCs has declined in recent years.