Slower Credit Growth Keeps CD Ratio Below 80%, Says Report

Credit off-take refers to the amount of credit (loans and advances) that banks and financial institutions are lending out to individuals and businesses

On the flip side, the report also reveals that the Credit-Deposit (CD) ratio experienced a marginal decline, staying below the 80 per cent mark for the fifth consecutive fortnight

Source : ABPLIVE AI

In the current fortnight, deposit growth has outpaced credit growth and credit offtake and deposit growth has cooled, according to a report by CareEdge.

The report says credit offtake and deposit growth has cooled year on year basis weighed down by a high base effect and muted growth across segments.

The CareEdge report noted, "as of May 30, 2025, credit offtake reached Rs 182.9 lakh crore, marking an increase of 9.0% year-on-year (y-o-y), significantly slower than last year's rate of 16.1 per cent (excluding merger impact)."

Credit off-take refers to the amount of credit (loans and advances) that banks and financial institutions are lending out to individuals and businesses.

On the deposit side, by May 30, 2025, it has reached Rs 231.7 lakh crore, up 9.9 per cent (y-o-y) and increased by 1.25 per cent sequentially. However, the attained level is less than the 12.2 per cent growth (excluding merger impact) recorded last year.

As per the report, the total outstanding certificate of deposits issuances reached Rs 5.13 lakh crore, boosted by banks' continued dependence on funds through short-term certificate deposits amidst subdued deposit growth.

On the flip side, the report also reveals that the Credit-Deposit (CD) ratio experienced a marginal decline, staying below the 80 per cent mark for the fifth consecutive fortnight. The reason behind the downfall was primarily driven by a higher deposit inflow of Rs 2.85 lakh crore compared to a lower credit offtake of mere Rs 0.59 lakh crore during the current fortnight.

"The credit-to-total-assets ratio witnessed a marginal downtick and decreased to 69.9%, meanwhile, the Government Investment-to-total-assets ratio remained flat at 25.6%, for the fortnight ending May 30, 2025," the report by CareEdge said.

Additionally, overall government investments totalled Rs 67.1 lakh crore as of May 30, 2025, reflecting a y-o-y growth of 8.5 per cent and a sequential increase of 0.4 per cent.

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)