Indian Banks Boost Holdings of Corporate Notes to Record High
- Company debt purchases by local banks jump after RBI moves
- Ample cash conditions in India boost demand for company notes
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Indian banks boosted their holdings of rupee notes from companies to an all-time high recently, in a sign that policy measures aimed at boosting funding to companies during the pandemic are working.
Total holdings of corporate bonds and commercial paper held by local banks surged to a record of almost 7 trillion rupees ($93 billion) in late May, data from the Reserve Bank of India this week show. The central bank extended a $50 billion emergency credit line to lenders in March to spur them to boost financing to companies squeezed by the pandemic and an economic contraction caused by steps to contain it.