India's top private banks are betting on a sustained pick up in lending after reporting healthy numbers in the first quarter of the fiscal year, as more companies shift away from pricier bond market borrowings to cheaper loans.

Lenders including HDFC Bank, ICICI Bank, and Axis Bank reported strong quarterly results driven by robust credit demand from corporate borrowers. The shift comes as bond yields remain elevated, making bank loans more attractive for companies seeking working capital and expansion funding.

Bank executives noted that corporate loan growth accelerated to double-digit percentages in Q1, outpacing retail lending for the first time in several quarters. This trend reflects improving business confidence and increased capital expenditure plans across manufacturing and infrastructure sectors.

Analysts expect the momentum to continue through the fiscal year, supported by the Reserve Bank of India's stable interest rate policy and government capex push. However, asset quality monitoring remains crucial as exposure to highly leveraged corporates increases.