BofA Sees India Credit Growth Speeding Up After Polls on Capex

(Bloomberg) --

India’s loan growth is likely to gather pace after the upcoming national polls as companies boost capital expenditure, according to Bank of America Corp.

“We anticipate a significant pick-up in credit expansion plans of corporate India post elections,” Shankar Subramaniam, head of India corporate banking, told Rishaad Salamat on Bloomberg TV Thursday. 

Loan growth in India was at about 20% in the year through Dec. 29, the highest in more than a decade, latest central bank data compiled by Bloomberg show. The expansion was led primarily by retail loans in the world’s fastest-growing major economy. 

“If you look at private capex today it is limited to specific sectors,” Subramaniam said, referring to telecom, infrastructure and renewables as drivers of credit. Post elections, he expects the growth to become more broadbased. 

India’s general elections due April-May are seen to boost the economy further as Prime Minister Narendra Modi is expected to win a third term, providing policy continuity that’s crucial to bolster investor confidence.

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