New Delhi [India], March 27 : Credit offtake continues to rise but at a slower pace as compared to last year. As of March 7, total bank credit stood at Rs 181.3 lakh crore, reflecting an 11.1 per cent year-on-year (YoY) growth says a report by CareEdge Ratings
It said, "Credit offtake picked up marginally, while deposit growth slowed over the previous fortnight".
This is lower than the 12.1 per cent growth recorded in the same period last year (excluding the impact of mergers). The slowdown is attributed to a higher base effect, along with the Reserve Bank of India's (RBI) measures and concerns over the high credit-to-deposit ratio.
On the other hand, total bank deposits reached Rs 225.1 lakh crore as of March 7, growing by 10.2 per cent YoY. This is slightly lower than the 10.5 per cent growth recorded in the previous year.
The slower deposit growth is largely due to a higher base effect and tight liquidity conditions, despite banks offering attractive term deposit rates.
Sequentially, credit offtake rose by 0.88 per cent in the fortnight ending March 7, but the growth was slower than last year's pace. The RBI has repeatedly highlighted concerns over the rising credit-to-deposit ratio, which indicates that credit growth is outpacing deposits.
However, this gap remains significantly lower than the 6.70 per cent recorded in the same period last year.
The data of March 7, 2025, is compared with the data from two weeks earlier to observe changes in credit and deposit growth.
A higher credit-to-deposit ratio suggests that banks are lending more compared to their deposit inflows, which could pose liquidity risks in the long run.
The report indicated that while credit demand remains strong, deposit growth needs to pick up pace to support sustained lending. With tight liquidity conditions and the RBI's cautious stance, the banking sector will need to strike a balance between credit expansion and stable deposit inflows.
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