Notwithstanding the rapid developments in the Indian capital markets, the share of banking credit to firms and households taken together as a percentage to total credit at above 90% continues to remain high in comparison to that in advanced economies like France (around 50%) and USA (around 30%).
1 Bank finance for households has picked up significantly over the last decade, but household balance sheet still remain less leveraged compared to advanced economies. Banks also continue to be the most predominant source for funding the government deficits and their investment in government securities constitutes over half of the total market borrowing.