Infrastructure credit by banks and NBFC-IFCs in the country marginally grew to Rs 22.6 lakh crore in the first half of the current fiscal compared to Rs 22.5 lakh crore in 2019-20, says a report. “While the infrastructure credit grew 7 per cent in FY2020 (19 per cent in FY2019) to Rs 22.5 lakh crore as on March 31, 2020, it increased marginally to Rs 22.6 lakh crore as on September 30, 2020,” Icra Ratings said in the report.

 

According to Icra’s Vice President and Head (Financial Sector Ratings) Manushree Saggar, the tepidness in infrastructure credit in first half of 2020-21 was primarily due to the sequential degrowth (10 per cent) in banking sector credit to the infrastructure segment. However, non-banking financial companies-infrastructure finance company (NBFC-IFCs) continued to grow at a modest sequential pace of 12 per cent in this period, Saggar noted. She said that the growth was majorly led by disbursements related to the liquidity package announced by the government for cash-strapped discoms. The share of NBFC-IFCs in infrastructure credit has increased to 53 per cent as of September 30, 2020 from about 38 per cent five years ago, the report said.

 

The decline in share of banks during past few years was largely attributable to the conversion of their exposures to state distribution companies into bonds and subdued lending amid asset quality issues and capital constraints, it said. At the same time, portfolio for NBFC-IFCs continued to grow though largely at the back of growth in the public sector NBFC-IFCs, it said.