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CD Ratio Hits Multi-Decadal High Amidst Banking Shifts
31 Jan
Summary
- Credit-deposit ratio reached 82.17% on January 15, 2026.
- Bank credit grew 13.11% to Rs 201 lakh crore, deposits rose 10.6%.
- Average fresh deposit rates climbed to 5.67% in December 2025.
As of January 15, 2026, the Credit-Deposit (CD) ratio has reached an unprecedented 82.17%, marking a high not seen since January 2001. This significant increase is driven by a substantial rise in bank advances, which grew by 13.11% to Rs 201 lakh crore. This surge in lending has occurred while banks continue to face challenges in attracting sufficient deposits, which only rose by 10.6% to Rs 244 lakh crore.
The pressure to secure customer funds is evident in the upward trend of fresh deposit rates. In December 2025, the average rate for new domestic term deposits increased by 8 basis points from the previous month to 5.67%. Both public sector and private sector banks hiked these rates, indicating a competitive environment for deposits.
Conversely, the rates offered on existing, or outstanding, deposits have been declining. The average outstanding deposit rate saw a decrease of 5 basis points in December 2025, settling at 6.68%. This suggests a strategic shift by banks, prioritizing new funds while reducing costs on older liabilities.
