India working capital demand at banks has risen 15% to 20% over several months as higher raw-material costs and longer shipping times increased companies’ short-term funding needs, bankers said. The increase added to corporate loan growth in the September 2026 quarter.

India working capital cycles stretch

Anu Aggarwal, head of corporate and transaction banking at Kotak Mahindra Bank, said the escalation of the West Asia conflict had lengthened working-capital cycles for Indian companies. Oil-linked input costs have risen, while transit times have increased on both the purchase and sales sides, she said.

For several mid-sized and large companies, working-capital requirements increased by at least 12% to 15%, and in some cases by as much as 20%, Aggarwal said. Longer cycles can leave companies needing funding for more time between paying for inputs and collecting sales proceeds.

One example of such financing is Kotak Mahindra Prime’s inventory funding for automobile dealers, which supports their working-capital needs for stocking and selling vehicles. The product is an illustration of working-capital finance, not evidence of the reported increase in demand.

Corporate loan portfolios expand

Short-term borrowing needs contributed to corporate loan growth alongside refinancing, acquisition financing and new capital expenditure. RBL Bank executive director Jaideep Iyer said the bank’s corporate growth was largely driven by working capital.

RBL’s corporate loan book grew 58% year on year in the September quarter. Axis Bank reported 34% growth, while ICICI Bank’s domestic corporate portfolio rose 30.6%. Kotak Mahindra Bank’s corporate banking advances increased 25%.

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