Slowdown blues: Incremental credit flow drops 64% to Rs 6.04 trn in FY20

Economic slowdown hits activity, adding fuel to the fire

Incremental credit flow from banks, bonds, and commercial papers in India declined by 64 per cent to Rs 6.04 trillion in FY20 from Rs 15.82 trillion in FY19, on account of the slowdown and high level of risk aversion among bankers, says ICRA.
 

The rating agency expects incremental credit flow of Rs 7.3-9.7 trillion during FY21, a year expected to be hit hard by massive economic disruption due to the lockdown.
 

The expectation of incremental credit flow in FY21 is driven by the higher credit demand in light of weakening cash flows of borrowers, which has been caused by the