What is the credit-deposit ratio in Bihar?

Bihar's credit-deposit ratio was 52.8% in 2024, indicating a low level of credit disbursement relative to deposits.

Why are Bihar's public sector banks underperforming?

Public sector banks in Bihar hold a large share of deposits but disburse a smaller proportion of credit, suggesting underutilization of funds.

Are there credit-deficient districts in Bihar?

Yes, according to NABARD, 28 out of 38 districts in Bihar are classified as credit deficient.

Home / Business and Economy / Bihar Banks Underperform: Credit Gap Widens

Bihar Banks Underperform: Credit Gap Widens

16 Dec, 2025

•

Summary

Bihar's credit-deposit ratio stands at a low 52.8% in 2024.
Public sector banks hold 75% of deposits but disburse only 59% of credit.
28 out of 38 Bihar districts are classified as credit deficient by NABARD.

Bihar Banks Underperform: Credit Gap Widens

Bihar's banking sector exhibits a concerningly low credit-deposit ratio (CDR) of 52.8% as of 2024, significantly below the desired 70-80% range. This indicates a substantial gap between funds mobilized and credit disbursed within the state.

Public sector banks in Bihar, which collect 75% of deposits, account for only 59% of advances. Conversely, private sector banks disburse a disproportionately larger share of credit relative to their deposit collection. This disparity suggests underutilization of funds by public banks and over-leverage by private ones.

Furthermore, a NABARD report identifies 28 out of Bihar's 38 districts as credit deficient. Policy suggestions include a strong push for public sector banks to increase credit disbursement, potentially spurred by government infrastructure investments, and to improve their asset quality by reducing non-performing assets.