Credit Growth Exceeded Deposit Growth Rate of Banks: RBI

As credit growth is outpacing deposit growth in the recent period, credit-deposit (C-D) ratio has been on the rise: In June it stood at 73.5 per cent at the all-India level (70.5 per cent a year ago) and 86.2 per cent for metropolitan branches of banks (84.3 per cent a year ago), the RBI said.

According to RBI, the credit growth (y-o-y) accelerated further to 14.2 per cent in June from 6 per cent a year ago and 10.8 per cent a quarter ago.

Credit growth has been broad-based: All the population groups (i.e., rural, semi-urban, urban and metropolitan), all the bank groups (i.e., public/private sector banks, foreign banks, regional rural banks, small finance banks) and all the regions of the country (i.e., central, eastern, north-eastern, nothern, southern and western) recorded double-digit annual credit growth in June, the RBI said.

Aggregate deposit growth (y-o-y) has remained in the range 9.5-10.2 per cent during the last five quarters: Metropolitan branches continue to account for over half of the bank deposits and their share increased marginally over the last one year.

The share of current account and savings account (CASA) deposits in total deposits has been increasing over the last three years (42.0 per cent, 43.8 per cent and 44.5 per cent in June of 2020, 2021 and 2022, respectively).