Banks’ CD ratio continues to stay above 80%, data shows

The credit-deposit ratio (CD ratio) of banks moderated marginally to 80.2% in the fortnight ended October 31, down from 80.4% in the prior fortnight, yet remained firmly above the 80% threshold according to Reserve Bank of India (RBI) data.

Bank CD ratios first crossed the 80% level in March 2024, then again in March 2025, and have consistently exceeded this mark since September 2025 as per CAREEdge Ratings data. Private sector banks maintain comparatively higher CD ratios than their public sector counterparts. Financial institutions face ongoing challenges in deposit mobilization as customers increasingly shift funds to higher-yielding alternatives. This dynamic restricts banks’ capacity to lower deposit rates further, even as lending rates have declined following repo rate reductions – a trend compressing net interest margins, analysts noted.

Credit offtake reached ₹193.9 lakh crore as of October 31, marking an 11% year-on-year expansion. This growth was supported by festive-season demand, GST rate reductions, sustained activity in retail and MSME segments, and selective corporate borrowing amid rising bond yields.

Vehicle financing during festive months is anticipated to provide additional momentum to credit expansion. However, current credit growth trails the 12% pace recorded during the corresponding period last year, attributed to softer corporate demand and curtailed lending to specific sectors.

Bank deposits grew 10% year-on-year to ₹241.7 lakh crore, decelerating from the 11% expansion observed a year earlier. This moderation reflects the influence of the ongoing rate-cut cycle, which has enhanced the relative appeal of alternative investment products compared to conventional bank deposits.

Published on November 21, 2025