Credit-to-Deposit ratio in banks remain below 80 pc as demand in credit slows down: Report

NEW DELHI: The credit-to-deposit ratio in Indian banks has stayed below 80 per cent as credit offtake in the country continues to lag, according to a report by CareEdge Ratings.

The report highlighted that while both credit offtake and deposit growth have increased sequentially, they remain significantly lower than the levels seen last year. Deposits continued to outpace credit offtake in the current fortnight, leading to a narrowing of the credit-deposit gap. It stated “Credit to Deposit Ratio Remains Below 80 per cent as Credit Offtake Lags”.

The report data pointed out that as of July 25, 2025, credit offtake stood at Rs 185.0 lakh crore, reflecting a 10.0 per cent year-on-year (y-o-y) growth. This pace is notably slower compared to the 15.1 per cent growth recorded in the same period last year, excluding the impact of mergers. The report attributed the slowdown to a high base effect and muted growth across segments.

On the other hand, deposits rose by 10.2 per cent y-o-y to Rs 233.5 lakh crore as of July 25, 2025. This was slightly lower than the 11.0 per cent growth rate seen in the corresponding period last year, excluding merger impact. The moderation in deposit growth was primarily due to an unfavourable base effect, deposit repricing, and an increase in alternative investment opportunities.

The report noted that the credit-to-total-assets ratio remained unchanged at 72.0 per cent, while the Government Investment-to-total-assets ratio also stayed flat at 26.2 per cent. Overall government investments stood at Rs 67.3 lakh crore as of July 25, 2025, marking a 6.5 per cent y-o-y growth and a 0.2 per cent rise sequentially.

In terms of deposit composition, time deposits to others grew by 9.2 per cent y-o-y to Rs 204.7 lakh crore, slowing from the 10.9 per cent growth seen in the same period last year. Meanwhile, demand deposits registered a sharper increase, rising 17.7 per cent y-o-y to Rs 28.7 lakh crore.

Despite the sequential improvement in both credit and deposits, the report outlined that the overall pace remains slower than last year, keeping the credit-to-deposit ratio below the 80 per cent mark. (ANI)