MUMBAI: Banks’ credit-to-deposit ratio reached an all-time high of 83% as of March 15, 2026, after deposits fell and credit continued to expand during the two weeks of the report.Total deposits fell by Rs 1.8 lakh crore, and credit growth outpaced deposit mobilization during the current financial year, with incremental credit standing at Rs 25.3 lakh crore exceeding incremental deposits of Rs 24.3 lakh crore.
As a result, the percentage of additional credit deposits reached 103.9%. Historically, a credit deposit ratio of 80% is considered healthy as it takes into account 3% in bank deposits that have to be held as cash reserves and 18% in liquid government bonds (statutory liquidity ratio) to the tune of Rs 250,000 crore, while bank credit rose by Rs 18,672 crore to Rs 207.6 lakh crore. According to the data, the discrepancy between deposits and credit pushed the ratio to a record level.
Credit growth has outpaced deposit mobilization during the current financial year, with incremental credit at Rs 25.3 lakh crore exceeding incremental deposits of Rs 24.3 lakh crore. As a result, the percentage of additional credit deposits reached 103.9%. Historically, a credit deposit ratio of 80% is considered healthy because it takes into account the 3% of bank deposits that must be held as cash reserves and the 18% in liquid government bonds (statutory liquidity ratio).The decline in deposits coupled with the expansion in credit widened the gap between credit growth (13.8%) and deposit growth (10.8%) for the fiscal year.
Prior to the current fiscal year, the last period in which the credit deposit ratio consistently exceeded 100% was between late 2022 and late 2023, covering FY23 and early FY2024. During the pandemic recovery phase, pent-up demand for business and retail credit rose 16% to 17% year-on-year, while deposit growth lagged at 9% to 10%, keeping the ratio in the 100% range. To 130%.Part of the recent credit boom reflects a change in reporting dates from alternate Fridays to the 15th and 30th of each month, which captures banks’ payments at the end of the quarter.