Are Bank Deposits Outpacing Lending Growth? Credit-to-Deposit Ratio at 79.3%: Report
Synopsis
Discover the latest insights on the banking sector as bank deposits outpace lending growth. With the credit-to-deposit ratio remaining stable, what does this mean for the financial landscape in India? Explore the factors influencing this trend and its implications for the economy.
Key Takeaways
Deposits outgrowing loans by 20 bps.
Credit-to-deposit ratio remains stable at 79.3% .
Deposits up 10.2% YoY to Rs 235 lakh crore.
WACR has decreased to 5.45% .
Government investments rose by 6.2% YoY .
New Delhi, Sep 9 (NationPress) The growth of bank deposits has outstripped the increase in credit offtake by 20 basis points in the fortnight concluding on August 22, 2025, according to a report released on Tuesday.
As of August 22, the overall credit offtake stood at Rs 186.4 lakh crore, marking a 10% year-on-year (YoY) rise, which is notably lower than the 14.9% growth recorded in the previous year, as per insights from ratings agency CareEdge Ratings.
The credit-deposit ratio has remained stable at 79.3%, staying below the 80% threshold for the eleventh consecutive fortnight.
Deposits witnessed an increase of 10.2% YoY, reaching Rs 235 lakh crore, which is a decline from the 11.3% growth seen the prior year. This slower progression is primarily attributed to ongoing deposit repricing and a rise in alternative investment opportunities, the report indicated.
On a fortnightly basis, credit expanded by Rs 0.39 lakh crore, with the slowdown in credit growth being influenced by subdued corporate demand, limited private capital expenditure, a deceleration in unsecured personal lending, and reduced credit flow to non-banking financial companies (NBFCs).
Time deposits increased by 9.2% to Rs 206.1 lakh crore, down from 10.9% growth in the same period last year, the report noted. In contrast, demand deposits showed a robust growth of 18.2% to Rs 28.9 lakh crore.
The Short-Term Weighted Average Call Rate (WACR), at which banks engage in overnight lending and borrowing in the interbank call money market, decreased to 5.45% as of August 29, down from 6.59% one year prior. The WACR has dipped below the policy repo rate of 5.50% following three rate cuts this year and liquidity measures implemented by the Reserve Bank of India (RBI).
Banks' credit-to-assets ratio remained unchanged at 72.1%, while the government investment-to-assets ratio fell by one basis point to 26.1%. Overall government investments rose to Rs 67.6 lakh crore, reflecting a 6.2% YoY growth.
Point of View
It's evident that the banking sector is at a pivotal moment. The disparity between deposit growth and lending is noteworthy, indicating a cautious approach by banks amidst evolving economic conditions. As we navigate these changes, it's crucial to stay informed and adaptable.
NationPress
8 Jul 2026
Frequently Asked Questions
What is the current credit-to-deposit ratio?
The current credit-to-deposit ratio is 79.3%, remaining below 80% for the eleventh consecutive fortnight.
How much have bank deposits increased year-on-year?
Bank deposits have increased by 10.2% year-on-year, reaching Rs 235 lakh crore.
What are the factors affecting credit growth?
Credit growth is influenced by subdued corporate demand, limited private capital expenditure, and reduced credit flow to non-banking financial companies.
What is the current Short-Term WACR?
As of August 29, the Short-Term Weighted Average Call Rate (WACR) is 5.45%.
How have government investments changed?
Government investments have increased to Rs 67.6 lakh crore, reflecting a 6.2% year-on-year growth.
