In July, bank credit exposure to non-banking financial companies (NBFCs) in India increased by 23.6% year-on-year, reaching Rs 13.8 lakh crore, representing 9.3% of total credit, according to an analysis of RBI data by a ratings agency. This growth is attributed to the phased reopening of the economy following the pandemic, with the trend accelerating into the first quarter of FY24. Meanwhile, mutual funds’ debt exposure to NBFCs, including commercial papers (CPs) and corporate debt, saw a significant increase, rising by 60.1% to Rs 1.81 lakh crore in July. Despite this, overall NBFC borrowings declined by 3.3% month-on-month due to the merger of HDFC with HDFC Bank.