what do you think ? are banks corporate books getting riskier ? MSME credit and industrial credit growth is quiet high and these are typically A or lower rated companies ... if they can't absorb the current energy shock these loans may go sour down the line ... what does your team think ?
Hi, so the corporate books we talked about are different from the MSME lending that is reported by banks. The former are usually big corporate houses, while the latter are smaller biz. Banks have expressed concerns of "possible" credit quality risk in the latter, but that doesn't stop them from carefully lending there.
As for the corporate book goes, no bank has given any commentary on that.
Can the loans go bad should the current energy shock affect MSMEs, definitely yes! That's because energy and capital are two of the biggest painpoints for MSMEs as per studies, but then again we should not confuse the corporate/wholesale book with the MSME ones.
Dear Zerodha Team,
what do you think ? are banks corporate books getting riskier ? MSME credit and industrial credit growth is quiet high and these are typically A or lower rated companies ... if they can't absorb the current energy shock these loans may go sour down the line ... what does your team think ?
Hi, so the corporate books we talked about are different from the MSME lending that is reported by banks. The former are usually big corporate houses, while the latter are smaller biz. Banks have expressed concerns of "possible" credit quality risk in the latter, but that doesn't stop them from carefully lending there.
As for the corporate book goes, no bank has given any commentary on that.
Can the loans go bad should the current energy shock affect MSMEs, definitely yes! That's because energy and capital are two of the biggest painpoints for MSMEs as per studies, but then again we should not confuse the corporate/wholesale book with the MSME ones.
Thanks for the clarification. Do you have any idea of the MSME loan book across the top 10 banks ? Whether those expanded in the last 6 months ?
Don't want to give numbers without verifying, but MSMEs did pick up during the last couple of months slightly.