India city Mumbai covid-19 experts economy Government India city Mumbai

Borrowers avoid fresh debt even as govt pushes stimulus through bank loans

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MUMBAI: Even as the government’s stimulus relies heavily on flow of credit to sections of the economy, borrowers do not seem to be in the mood for more loans at the moment, bankers and experts pointed out.

They said while banks have been sanctioning loans, customers are not utilising their limits, awaiting the lifting of the lockdown and the restarting of economic activities.

A comparison between the loan sanction data from the finance ministry and the actual credit flow data from the Reserve Bank of India (RBI) point to a divergence of over ₹4 trillion.

Bankers sanction loan limits to borrowers based on a number of factors, including credit history and balance-sheet strength.

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