Banks to Raise Record Rs 1.3 Lakh Crore from Bonds in FY25 Amid Slow Deposit Growth

A report reveals that banks will raise Rs 1.3 lakh crore from bond issuances in FY25 due to slower deposit growth. Public sector banks will dominate, driven by the need for infrastructure bonds. This marks the highest bond issuance ever, surpassing previous records and highlighting the shift in fundraising strategies.

Banks are expected to raise Rs 1.3 lakh crore through bond issuances in FY25, amid slower deposit growth, a report revealed on Tuesday.

The anticipated bond issuances, ranging between Rs 1.2-1.3 lakh crore, mark the highest level ever for the banking system. Almost 85% of these issuances will be attributed to public sector banks, spurred by a significant appetite for infrastructure bonds, according to domestic rating agency Icra.

Tight liquidity conditions and credit growth outpacing deposit growth necessitate banks to seek alternative fundraising avenues. In FY24, banks had already raised Rs 1 lakh crore through bonds, with the mid-fiscal year of FY25 seeing Rs 76,700 crore mobilized—a 225% growth compared to the same period in FY24.

(With inputs from agencies.)