Are Bank Deposits Outpacing Lending Growth? Credit-to-Deposit Ratio at 79.3%: Report
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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
09/09/2025
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.
