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Companies borrow less through commercial papers in August
In August 2025, Indian companies and financial institutions borrowed much less money using commercial papers—raising ₹1.18 lakh crore, which is down 23% from July and 12% lower than last year.
The big reason? Borrowing got pricier as bond yields climbed, with the 10-year government bond yield rising to 6.62%.
Banks prepare for potential shift from corporate lending to bank loans
This spike in yields follows recent RBI policy changes, including a major rate cut earlier this year.
With borrowing costs up and yields still fluctuating (recently dipping to 6.46%), many lenders expect companies might turn to banks for loans instead of the short-term debt market.
Banks like Canara Bank and Indian Bank are already gearing up for more corporate lending if this trend continues.