Credit-deposit ratio of banks touches a record 83%

MUMBAI: Credit-deposit ratio of banks hit an all-time high of 83% as of March 15, 2026, after deposits fell and credit continued to expand during the reporting fortnight.

Aggregate deposits declined by Rs 1.8 lakh crore duCredit growth outpaced deposit mobilisation through the current financial year, with incremental credit at Rs 25.3 lakh crore exceeding incremental deposits of Rs 24.3 lakh crore. As a result, the incremental credit-deposit ratio stood at 103.9%.

Historically, an 80% credit-deposit ratio is seen as healthy as it factors in the 3% of bank deposits that have to be maintained as cash reserves (CRR) and 18% in liquid govt bonds (statutory liquidity ratio) ring the fortnight to Rs 250 lakh crore, while bank credit rose by Rs 18,672 crore to Rs 207.6 lakh crore. According to data, the divergence between deposits and credit pushed the ratio to a record level.

Credit growth outpaced deposit mobilisation through the current financial year, with incremental credit at Rs 25.3 lakh crore exceeding incremental deposits of Rs 24.3 lakh crore. As a result, the incremental credit-deposit ratio stood at 103.9%. Historically, an 80% credit-deposit ratio is seen as healthy as it factors in the 3% of bank deposits that have to be maintained as cash reserves (CRR) and 18% in liquid govt bonds (statutory liquidity ratio)

The decline in deposits alongside the expansion in credit widened the gap between credit growth (13.8%) and deposit growth of (10.8%) for the financial year.

Before the current financial year, the last period when credit-deposit ratio consistently crossed 100% was between late 2022 and late 2023, covering FY23 and early FY24. During the pandemic recovery phase, pent-up corporate and retail credit demand surged at 16%-17% YoY, while deposit growth lagged at 9%-10%, keeping the ratio in the 100%-130% range.

Part of the recent credit surge reflects a change in reporting dates from alternate Fridays to the 15th and 30th of each month, which captures quarter-end disbursements by banks.


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