Core Insights - The total flow of financial resources to the corporate sector increased to Rs 35 lakh crore in FY25, reflecting a 3% rise from the previous year, but indicates a shift away from traditional bank credit [1][5] - Nearly 49% of the total funding, amounting to Rs 17.1 lakh crore, was sourced from non-bank channels, including corporate bonds, NBFC loans, equity issuances, and foreign direct investment [1][5] - Demand for bank credit fell by 14% to Rs 17.9 lakh crore, attributed to strong equity market performance encouraging companies to opt for share issuances over debt [2][5] Funding Composition - Non-financial corporates raised Rs 3.8 lakh crore through equity in FY25, marking a significant 188% increase compared to the previous year [3][5] - Lending from NBFCs and financial institutions to corporates rose by 20%, totaling Rs 6.1 lakh crore [3][5] - Borrowings through corporate bonds and commercial papers by non-bank entities increased by 15% to Rs 2.1 lakh crore [3][5] Economic Context - The decline in bank credit is also linked to larger corporates utilizing internal accruals for business expansion, as noted by RBI governor Sanjay Malhotra [5] - The overall flow of financial resources to the commercial sector has increased when considering non-bank sources, despite the slowdown in bank lending [5] - To stimulate credit demand, the RBI has reduced policy rates by 100 basis points since February and ensured ample liquidity in the banking system [5]