The credit market is in a curious state. Companies that need credit are not getting it from banks, while loans are offered to those who do not need it.
There were not many takers even for the covid-19 credit lines, which the government wants banks to aggressively push, two bankers said requesting anonymity.
Demand is primarily from small businesses, which are finding it difficult to pay staff salaries and meet fixed costs. “It is the small businesses, like a supplier to large manufacturers, that needs the covid-19 emergency credit lines.
The working capital cycle of these small borrowers have been hit because of payment delays by their big customers during the lockdown," said the first banker.