Working capital drawdowns of corporates and MSME borrowers rising with input costs
Mumbai: Banks are seeing a rise in drawdowns on the working capital limits of corporates and MSME borrowers as rallying commodity prices raise input costs. Bankers said while earlier 30-40% utilisation in highly-rated large corporates was a big challenge, these limits have now been exhausted by up to 60-70%, raising hopes of fresh loans.
"The working capital drawdowns are increasing on the corporate book because their input costs have gone up," said Samuel Joseph, deputy MD,said Samuel Joseph, deputy MD, IDBI Bank NSE -0.41 %. "Many companies that were not utilising fund-based exposures at all, have started using that, which will add to the overall corporate credit growth. A 30-40% utilisation in highly rated large corporates was a big challenge earlier, today they are pushed up to 60-70%.