Corporate borrowing activity has accelerated sharply.
India’s economic growth appears to have entered FY27 on a stronger footing than many anticipated, with multiple financial indicators pointing to robust activity in the April-June quarter, according to an SBI Research report.The strongest signal came from the banking system, where deposits surged by nearly ₹7 lakh crore in the fortnight ended June 30, marking the third-highest fortnightly increase in 29 years. SBI estimates that, even after accounting for quarter-end balance sheet effects, a significant part of the rise was driven by fresh capital inflows through FCNR(B) deposits, external commercial borrowings and overseas fund mobilisation. The report pegs potential capital inflows during the period at around $15 billion.At the same time, corporate borrowing activity has accelerated sharply. Commercial Paper (CP) issuances rose 19 per cent year-on-year in the first quarter, touching ₹5.38 lakh crore, while June issuances hit a 55-month high. Incremental bank credit expanded to ₹5.6 lakh crore in Q1FY27, more than double the ₹2.4 lakh crore recorded a year earlier. SBI says the simultaneous rise in CP issuances and bank lending is a strong indicator of expanding economic activity rather than a mere shift in funding preferences.Sectors witnessing strong CP activity — including power, steel, real estate, oil and gas, and financial services — have also reported healthy credit growth and accounted for nearly 69 per cent of new project announcements during the quarter.With foreign inflows reviving, reserves rising and borrowing demand remaining buoyant, SBI believes growth momentum in Q1FY27 may have surprised on the upside, strengthening the outlook for the broader economy.Published on July 10, 2026
