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Mumbai: Corporate India is increasingly tapping non-banking channels to meet its funding requirements, with nearly half of the total resources raised in FY25 coming from equity markets, bonds, and loans from non-banking financial companies (NBFCs), Reserve Bank of India (RBI) data showed.The total flow of financial resources to the corporate sector rose to ₹35 lakh crore in FY25, marking a modest 3% increase over the previous year. However, the composition of this funding reflects a shift away from traditional bank credit, signalling a broader economic slowdown.Of the ₹35 lakh crore raised, ₹17.1 lakh crore - or nearly 49% - came from non-bank channels such as corporate bonds, NBFC loans, equity issuances and foreign direct investment. By contrast, demand for bank credit declined 14% to ₹17.9 lakh crore.Bankers attribute this shift to the strong performance of equity markets, which encouraged companies to raise capital through share issuances rather than debt. Non-financial corporates raised ₹3.8 lakh crore via equity in FY25, up 188% over the previous year."The larger established companies prefer to use conventional channels where banks are the main touch point while IPOs are largely used by start-ups or first-time listing of companies," said Madan Sabnavis, chief economist, Bank of Baroda.He added that the slowdown in bank credit may also stem from cautious lending towards NBFCs and unsecured retail segments and high base effect from FY24 when bank credit surged 20%.Central bank data also shows that NBFCs and financial institutions ramped up lending to corporates, disbursing ₹6.1 lakh crore, up 20%. Borrowings through corporate bonds and commercial papers by non-bank entities rose 15% to ₹2.1 lakh crore.123932818Signs of MaturityGaura Sengupta, economist at IDFC First Bank, noted that as economies mature, funding sources tend to diversify."In developed markets like Europe, bank credit remains dominant, whereas in the US, the corporate bond market plays a larger role," she said.Another factor contributing to the decline in bank credit is the increased use of internal accruals for business expansion, as pointed out by RBI governor Sanjay Malhotra in the August policy. “Profitability of large corporates has increased, their internal resources have become an important source for business expansion,” he stated. Despite the slowdown in bank lending, Governor Malhotra emphasised that the overall flow of financial resources to the commercial sector has increased, if the flow of funds from non-bank sources is included. To stimulate credit demand,RBI has eased policy rates by 100 basis points since February — after a two-year pause — and ensured ample liquidity in the banking system to facilitate smooth transmission of rates to borrowers

Mumbai: Fear in the Indian stock market has ebbed to levels not seen in recent times, signalling that traders believe that the worst of the declines may be over. NSE's Volatility Index or VIX - a measure of traders' expectations of the likelihood of near-term risks in the market - is around the lowest level since its existence. While it means that options traders do not expect bouts of sharp swings, the low reading could also be masking some complacency among market participants.The VIX, which made a lifetime low of 10.12 levels on Friday, closed at 10.27 on Tuesday, down 1.2% over the previous trading session. The Nifty ended 0.7% higher at 25,239.1 on Tuesday."VIX at multi-year lows mean investors feel confident and calm," said Somil Mehta, head of Alternate Research, Mirae Asset ShareKhan. "But this also means complacency."The drop in VIX comes ahead of the much-awaited US Federal Reserve's policy meeting, where a rate cut of 25 basis points is widely expected. The index has declined 16.8% in the past month, while the Nifty has now moved up 1.5%. Usually, the VIX spikes before crucial market-moving events on account of the uncertainty, but this time, traders seem unperturbed."Over the past four weeks, markets have largely discounted both positive and negative news, reflecting a sense of fatigue among participants due to persistent news flow and ongoing uncertainty, reducing the 'fear' in the market," said Sham Chandak, head of institutional equities at Elios Financial Services.Chandak said the option writing activity has recently surged to its highest levels in months, suggesting that institutional investors are positioning for limited near-term movement."The low VIX readings are due to the lower implied volatility (as shown by lower options premiums), and a sense of lack of near term triggers," he said.VIX is a broad index of implied volatility, which in turn is a key component of options premium pricing. A higher VIX means traders anticipate bigger swings, making options costlier, while a lower VIX signals calmer markets and cheaper options.Rajesh Palviya, head of technical and derivatives research at Axis Securities said the VIX typically rises in response to unexpected events that drive up options premiums."However, recent market movements have shown that most adverse developments, such as sustained FII outflows, the imposition of 50% tariffs on Indian exports to the US, and a slowdown in earnings, were largely anticipated by participants." 123932753Optimism or Overconfidence?Palviya said historically, a low and falling VIX has often been followed by new highs in the market, and he believes the indices may continue to move upwards from here.Some analysts warn that lower VIX readings for longer periods could foster a deceptive calm.

Mumbai: Corporate India is increasingly tapping non-banking channels to meet its funding requirements, with nearly half of the total resources raised in FY25 coming from equity markets, bonds, and loans from non-banking financial companies (NBFCs), Reserve Bank of India (RBI) data showed. The total flow of financial resources to the corporate sector rose to Rs 35 lakh crore in FY25, marking a modest 3% increase over the previous year. However, the composition of this funding reflects a shift away from traditional bank credit, signalling a broader economic slowdown. Of the Rs 35 lakh crore raised, Rs 17.1 lakh crore — or nearly 49% —came from non-bank channels such as corporate bonds, NBFC loans, equity issuances and foreign direct investment. By contrast, demand for bank credit declined 14% to Rs 17.9 lakh crore. Bankers attribute this shift to the strong performance of equity markets, which encouraged companies to raise capital through share issuances rather than debt. Non-financial corporates raised Rs 3.8 lakh crore via equity in FY25, up 188% over the previous year. “The larger established companies prefer to use conventional channels where banks are the main touch point while IPOs are largely used by start-ups or first-time listing of companies,” said Madan Sabnavis, chief economist, Bank of Baroda. He added that the slowdown in bank credit may also stem from cautious lending towards NBFCs and unsecured retail segments and high base effect from FY24 when bank credit surged 20%.Central bank data also shows that NBFCs and financial institutions ramped up lending to corporates, disbursing Rs 6.1 lakh crore, up 20%. Borrowings through corporate bonds and commercial papers by non-bank entities rose 15% to Rs 2.1 lakh crore. SIGNS OF MATURITY Gaura Sengupta, economist at IDFC First Bank, noted that as economies mature, funding sources tend to diversify. “In developed markets like Europe, bank credit remains dominant, whereas in the US, the corporate bond market plays a larger role,” she said.Another factor contributing to the decline in bank credit is the increased use of internal accruals for business expansion, as pointed out by RBI governor Sanjay Malhotra in the August policy. “Profitability of large corporates has increased, their internal resources have become an important source for business expansion,” he stated. Despite the slowdown in bank lending, Governor Malhotra emphasised that the overall flow of financial resources to the commercial sector has increased, if the flow of funds from non-bank sources is included. To stimulate credit demand,RBI has eased policy rates by 100 basis points since February — after a two-year pause — and ensured ample liquidity in the banking system to facilitate smooth transmission of rates to borrowers.

The dollar fell across the board on Tuesday, sinking to four-year low against the euro, as investors firmed bets for a Federal Reserve interest rate cut this week. The euro was 0.5% higher at $1.827, its highest since September 2021. The U.S. dollar index, which tracks the U.S. currency against a basket of six major rivals, was 0.6% lower at 96.787, its lowest since July 3. The buck, which had steadied in recent months following a significant drop earlier in the year, has come under renewed selling pressure as expectations have risen for the Fed to resume cutting interest rates and as U.S. President Donald Trump renewed calls for aggressive monetary easing. Markets expect a 25-basis-point rate cut on Wednesday, with rapidly softening labor market data being the key driver of the ramp-up in easing bets in recent weeks. "The dollar is trading with a heavy tone across the board as investors brace for a dovish message in Wednesday's voting record, 'dot plot' summary of economic projections, and press conference," said Karl Schamotta, chief market strategist at Corpay. "Jerome Powell & Co are seen downplaying inflation risks and expressing a clear bias toward supporting labor markets -something that could help set the stage for a sequential set of cuts in the months ahead - and traders are positioning for asymmetric moves across most major currency pairs," Schamotta said. The dollar got little relief from data on Monday that showed U.S. retail sales increased more than expected in August. Investors remain concerned about U.S. economic growth amid labor market weakness and rising goods prices because of tariffs on imports. "There was a bounce-back in spending at food services and drinking places as well as a big jump in online spending. The consumer is down, but not out," Brian Jacobsen, chief economist at Annex Wealth Management, said in a note. Sterling was 0.4% higher at $1.36530, a more than two-month high, after data showed on Tuesday that Britain's jobs market has lost a little more steam, potentially easing worries at the Bank of England about persistent inflation pressures. The Office for National Statistics figures showed the number of workers on companies' payrolls falling for a seventh month in a row, while basic wage growth in the private sector - watched closely by the BoE - slowed to 4.7% between May and July from 4.8% in the three months to June. The BoE is expected to keep interest rates on hold this week, having cut in August. The euro found support Tuesday from data that showed that euro zone industrial production inched higher in July, confirming views that the sector is holding up despite trade tensions, even if its rate of expansion is anemic. German investor morale unexpectedly rose in September, the ZEW research institute said on Tuesday, in a sign of cautious optimism. Against the yen, the dollar slipped 0.5% to 146.76, ahead of the Bank of Japan policy meeting on Friday, with money markets expecting the central bank to keep rates at 0.5%. Japan's farm minister and the chief government spokesperson joined the race on Tuesday to lead the ruling party and replace outgoing Prime Minister Shigeru Ishiba, who announced his resignation last month. Cryptocurrency bitcoin < BTC=> was down 0.2% at $115,145, slipping for a fourth straight session. (Reporting by Saqib Iqbal Ahmed; Additional reporting by Joice Alves and Kevin Buckland; Editing by Ros Russell, Emelia Sithole-Matarise and Nick Zieminski)