PFIs Shift to Bank Borrowing Amid High Yields

Public Financial Institutions (PFIs) in India are borrowing more from banks instead of issuing bonds.

This is because the interest rates (yields) on bonds are still high, even though the central bank has cut rates.

Banks are lending more to PFIs because they are considered safe and support important sectors like infrastructure and renewable energy.

Some PFIs like NABARD and PFC have even cancelled their bond issuances because of these high yields.

Banks are also lending more to other financial companies (NBFCs) and for unsecured loans, showing a revival in these areas.