Corporate advance growth for large banks robust in Q2

Pickup driven largely by higher working capital demand

- SUBRATA PANDA

Large banks, private and state-owned, witnessed healthy growth in their corporate loan books in Q2FY26 as aggressive pricing seen in previous quarters gave way to greater pricing discipline.

The pickup was driven partly by fresh corporate investment but more by higher working-capital demand. Additionally, the loan pipeline for public-sector banks remains robust while private banks anticipate strong growth in the coming quarters.

Growth in major banks’ books comes at a time when, in Q1FY26, lenders had cautioned that companies were increasingly shifting from bank financing toward alternative sources such as the domestic debt market, overseas bond and loan markets, private credit funds, and internal cash reserves for their workingcapital needs.