Non-banks served 45% of commercial sector's funding till October

Corporate bond issuances surge as non-bank channels match banks in FY26

Non-bank sources now nearly equal banks in financing the commercial sector, with the funding gap closing rapidly.

Almost 45 per cent of total resources raised by the sector came from non-bank sources from April to October FY26, with corporate bond issuances surpassing equity issuances. Bonds, equity issuances, and credit by non-banking financial companies (NBFCs) were the largest contributors.

 

Corporate bond issuances exceeded the entire issuance in FY25. That year, non-bank sources accounted for nearly 49 per cent of total resources mobilised by the commercial sector. The rise in non-bank funding was driven by buoyant equity issuances in a strong domestic equity market, robust NBFC credit, and a rebound in short-term external credit.

 

“A gradual liberalisation of the Indian financial system has facilitated the creation of diverse funding avenues for the commercial sector. While the banking system remains a major source of finance, non-bank sources (both domestic and foreign) have emerged as important channels in recent years,” said a study by Reserve Bank of India staff published in the central bank’s September bulletin.

 

“During 2024-25, just a little less than half (48.7 per cent) of total resources to the commercial sector were mobilised from non-bank sources.” - Poonam Gupta, deputy governor, RBI in a speech on Wednesday.