The credit growth rate of the banks has reduced the growth rate of the loan limit by the current financial year. According to the leading rating agency Iqra, the rate of loan growth of banks in the current financial year may come down to 8.5 percent. This growth rate was increased to 13.3 percent in the last financial year (2018--19). Iqra has said that the main reason for the decline in the loan growth rate of banks is that the loan business is not able to grow much in the first 6 months of the current financial year.

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The agency said, "Given the crisis, no one is willing to place bets in the bond market." With this, the rate of increase in outstanding bonds can come down to around four percent every year, which was 12 percent last year. Due to the recent changes in the regulation of mutual funds, the debt raised through commercial paper may also decline by March 2020. It is estimated by Iqra that the total loan growth rate could fall from 13.5 percent to 6.2-6.8 percent during this period.

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The agency's statement that loan growth accelerated during the last financial year due to large borrowers like NBFCs and HFCs (housing finance companies) becoming dependent on banks for funding. At the moment, due to sluggish economic growth rate, low requirement of operating capital by the borrowers, etc., the pace of debt business declined in the first half of the current financial year.

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