India Banking – Credit-Deposit Ratio At Its Lowest; Spreads Have However Improved: Dolat Capital

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Deposit growth continues to outpace credit growth by a wide margin, aiding system liquidity.

Deposit growth has remained ~4% higher than credit growth for almost a year now and this has pushed down the credit-deposit ratio by over 5% to its lowest in a decade (excluding of demonetisation period).

Consequently, excess liquidity parked with the Reserve Bank of India under the reverse-repo has further increased in recent months.

Weak demand, impact of lockdowns, and risk aversion has limited growth thus far.

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Dolat Capital Bankig Report.pdf


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