Indian banks' credit-deposit (CD) ratio stood at a 62-year high of 82.6% in the first quarter of fiscal 2027, as loans grew faster than deposits, according to data from the Centre for Monitoring Indian Economy (CMIE). Loans rose 18.6% year-on-year to ₹219.3 lakh crore, while deposits grew 13.3% to ₹265.4 lakh crore. The 5 percentage point gap between loan and deposit growth was the widest since the June quarter of fiscal 2024. Analysts attributed the jump largely to a change in the composition of bank balance sheets rather than a deposit crunch — banks that had held excess investments have redeployed that money into loans, and bank capital at lifetime highs is also being lent out, making the loan book grow optically faster.
Key Facts & Details
9 points- 1Banks' credit-deposit ratio reached a 62-year high of 82.6% in Q1 FY27.
- 2Loans grew 18.6% year-on-year to ₹219.3 lakh crore.
- 3Deposits grew 13.3% year-on-year to ₹265.4 lakh crore.
- 4The 5 percentage point loan-deposit growth gap was the widest since the June quarter of FY2024.
- 5The data comes from the Centre for Monitoring Indian Economy (CMIE).
- 6Analysts credit the shift to banks redeploying excess investments into loans, not a deposit shortage.
Deep Dive
- +The CD ratio shows how much of every ₹100 of deposits a bank has lent out.
- +Bank capital at lifetime highs is also being lent, lifting the ratio.
- +One analyst noted the financialisation-of-savings argument applies only to retail deposits, not total deposits.
Exam Focus
What level did Indian banks' credit-deposit ratio reach in Q1 FY27, and why is it notable?
Exam Relevance & Angle
The credit-deposit ratio is a standard banking-awareness concept and a 62-year high with exact loan and deposit growth figures is precisely testable.
Target Exams
Background & Context
The credit-deposit ratio answers a simple question: of every ₹100 a bank has taken in as deposits, how much has it lent out? At 82.6%, banks are lending roughly ₹83 of every ₹100 deposited. A high ratio means a bank is working its deposits hard, which supports profits but leaves a thinner cushion — deposits are the cheapest and most stable funding a bank has, so if lending consistently outpaces deposit growth, banks must lean on costlier borrowings. That is why the gap between loan growth and deposit growth is watched as closely as the ratio itself.
Test Yourself
1 / 2Indian banks' credit-deposit ratio in Q1 FY27 stood at:
Source
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