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PM's Aide Urges Banks: Prioritize Cash Flow Over Collateral for Loans
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CNBC TV18•23-09-2026, 15:48
PM's Aide Urges Banks: Prioritize Cash Flow Over Collateral for Loans
- •Principal Secretary to the Prime Minister PK Mishra emphasized that India needs a new approach to financing growth, moving beyond traditional collateral-based lending.
- •Mishra highlighted India's strong 7.8% Q1 growth but cautioned about global risks like fragmenting alliances and supply chains used as strategic tools.
- •He called for a shift in the financial system from merely accommodating growth to actively enabling it, focusing on the economics of projects rather than just assets.
- •Banks should leverage modern data like GST returns and digital payment infrastructure to assess a business's cash-generating ability and future potential.
- •Mishra also stressed India's opportunity to become a production and innovation hub, requiring capital markets, banks, and VCs to finance ideas, not just factories.
Key Questions Answered
PK Mishra stated that banks must shift their focus from relying primarily on collateral to evaluating the actual cash-generating ability of businesses when approving loans, utilizing modern tools like GST returns and digital payment flows.
Mishra stressed that India has the opportunity to evolve from being merely a large consumption market into an essential global production and innovation hub by moving deeper into component manufacturing and product design.
Mishra explained that banks alone cannot sustain economic growth, meaning the next phase requires a broader financing ecosystem featuring larger institutional investors, infrastructure funds, and deeper capital markets.
