So far in the current financial year, public sector banks and private sector banks have raised Rs 38,811 crore through infrastructure bonds, against Rs 30,895 crore raised in the first half of fiscal 2024, according to data by Informist.
Several lenders such as Bank of Baroda and HDFC Bank Ltd. are said to have been in talks to tap the market with infrastructure bonds. Last week, NDTV Profit reported that Bank of Baroda plans to raise up to Rs 5,000 crore through a 10-year infra bond issue and has invited bids for this week.
As on Thursday, surplus liquidity in the banking system increased to Rs 1.07 lakh crore. While at the system level, it appears to be in surplus but liquidity conditions remain tight because of uneven distribution.
According to a report by CareEdge Ratings, banks’ credit and deposit ratio was 80.6% as of June 30, expanding by 430 basis points on year. Credit deposit ratio is a measure of the headroom available for banks to grow their advances, considering the level of deposits in the system. A higher CD ratio implies lesser headroom.
In an exclusive interview to NDTV Profit last week, Reserve Bank of India Governor Shaktikanta Das had said that it is positive to see banks raising funds through infrastructure bonds.
“The gap between credit and deposit growth, if it becomes persistent, then it can create liquidity issues. It is alright if it happens for 6-8 months or even a year, but if it continues, banks have to be careful in proactively dealing with liquidity management,” Das said.