Indian banks’ credit deposit (CD) ratio stood at 82.6% in the first quarter (Q1) of fiscal 2027 as loans grew faster than deposits, according to data from the Centre for Monitoring Indian Economy (CMIE).
Loans grew at 18.6% year-on-year (YoY) to ₹219.3 lakh crore, while deposits rose 13.3% YoY to ₹265.4 lakh crore in the reporting quarter. The variance between the loan and deposit growth is widest at 5 percentage points, since June quarter of fiscal 2024.
Loans grew least 8.5% in most quarters on a yearly basis since June quarter of 2022. Deposits however did not grow faster than 16% in the same period. Analysts say that it (CD ratio) has more to do with the change in the composition of the liabilities.
“Over the last five years, banks had excess investments on their balance sheet, which they have redeployed into loans. So optically, the loan book is growing faster and the investment book is growing slower, therefore the CD ratio looks higher. Second, the bank’s capital is at life time highs and this also gets lent out,” said Piran Engineer, Senior Research analyst at CLSA India, a registered institutional brokerage firm.
The Reserve Bank of India (RBI) had reduced the repo rate to 5.25% in December 2025, following a cumulative 125 basis points of cuts during 2025. Since then, it has kept rates unchanged, including at its June 2026 meeting, when it maintained the repo rate at 5.25%. In view of this, the banking sector is expected to benefit from broad-based loan growth
Published – July 23, 2026 08:02 pm IST
