Banks struggling to mobilise large deposits; C-D ratio rises to 80%: Report
Banks struggled to mobilise large deposits to meet the increasing credit demand in the last two financial years, a report said.
Outstanding credit disbursed by Scheduled Commercial Banks (SCBs) was at the highest level in 2023-24 amounting to Rs 1,64,98,006 crore, whereas in percentage terms, the growth of Credit-to-Deposit(C-D) ratio rose from 75.8 per cent to 80.3 per cent, Infomerics Ratings said in a report.
According to the RBI April 2024 Bulletin, during March 2024, the incremental Credit-Deposit Ratio(ICDR) remained around 95.94 per cent, whereas on March 8, 2024 this was at 92.95 per cent.
It may be observed that there was a much higher growth of credit of the SCBs compared to the growth of deposits, even as per the Quarter-on-Quarter (QoQ) basis, it said.
The growth of credit outpaced the growth of deposits during the period FY'19 to FY'24.
Alternative investments and substantial cash holdings in the unorganized sector slowed deposit accumulation, particularly in rural ar