In addition, companies have shifted to bank loans as yields in the corporate-bond market have remained elevated.
State Bank of India (SBI), the country’s largest lender, reported over 13 per cent year-on-year (Y-o-Y) growth in wholesale advances, driven by the services sector, petroleum and petrochemicals, and some others.
The bank has said it has a loan pipeline of ₹7.9 trillion. This includes loans that have been sanctioned but not taken or utilised.
According to C S Setty, chairman, economic activities picked up in the third quarter, following GST rationalisation.
The bank has seen an improvement of 300-400 basis points in working-capital drawing by companies, he said, adding that there is some movement from the bond market to the loan market, especially from the market of commercial paper.
For long-term loans, broadly, companies depend on banks, he said, adding that the trade deals with the European Union, Oman, New Zealand, and the United States indicate that market diversification is available for Indian firms.
Other major state-owned lenders also saw a healthy pickup in their wholesale books.
For Bank of Baroda, the wholesale books have grown 8.1 per cent Y-o-Y and 4.6 per cent sequentially, and the bank is aiming to close the year with 10 per cent Y-o-Y growth in its wholesale books.
According to Debadatta Chand, managing director and chief executive officer, the bank has a pipeline of almost ₹75,000 crore, with sanctions of ₹45,000 crore yet to be disbursed.
The remaining ₹30,000 crore is in the proposals received, and is in the process of getting sanctioned.
For Bank of India, the corporate books have grown 11 per cent Y-o-Y. The bank has a corporate-loan pipeline of ₹65,000 crore.
Bank of Maharashtra also reported robust growth of nearly 14.5 per cent Y-o-Y in its corporate books in Q3.
“We have done a lot of green financing, and (lending to) data centres and electric vehicles. So a lot of this kind of funding has increased and the portfolio has gone up,” said Nidhu Saxena, managing director and chief executive officer, adding that the bank was expanding into areas where new profitable opportunities were visible.
According to the RBI data, as of December end, credit to industry recorded 13.3 per cent Y-o-Y growth as against 7.5 per cent in the corresponding fortnight of last year. While credit to “Micro and Small” showed sharp acceleration in growth at 31 per cent Y-o-Y, “Medium” industries continued to exhibit robust expansion at 20.4 per cent Y-o-Y. Credit to large industries also picked up, growing at 7.5 per cent Y-o-Y.
Separately, large private banks, including HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank, also reported a sharp uptick in their corporate books.
HDFC Bank, the country’s largest private-sector lender, reported 10.3 per cent Y-o-Y growth and 4.1 per cent sequential growth in its wholesale loan books.
ICICI Bank, the second-largest private lender, posted 6.5 per cent sequential growth and 5.6 per cent Y-o-Y growth.
Axis Bank, the third-largest, reported the strongest growth, at 27 per cent Y-o-Y and 7 per cent sequentially.
Kotak Mahindra Bank reported a 17 per cent Y-o-Y surge and 4 per cent sequential growth.
According to bankers in the private sector, much of the corporate lending is occurring at external benchmark-linked rates (EBLR), where monetary transmission is faster. A recent report by SBI Research has highlighted that owing to a higher decline in bank lending rates, the pricing gap (with the corporate-bond yield) has narrowed. This is making firms shift back to banks.
 "SBI Chief C S Setty said economic activity picked up in Q3 after GST rationalisation, which led to better utilisation of working capital loans")