The Crossbill Team
In the last financial year of 2023-24, Indian Banks had a tough challenge facing a deposit crunch, the worst in last two decades, according to a report published in Livemint. The credit-deposit ratio currently stands at 80%, which is the highest since 2005, Livemint reported.
The high credit-deposit ration points that the most of bank’s deposits have been used for loans. The financial daily newspaper claims that, “Data from RBI showed the credit-deposit ratio at its highest in at least 20 years as loan offtake rose across categories including home loans and other loans for consumption.”
Bhavik Hathi, managing director of consulting firm Alvarez and Marsal, told Livemint, “Customers are chasing high-return, equity linked-products.”
In the previous financial year, banks had hiked deposit rates to try and attract more money in this way. Despite such measures the flow of cash has remained unaffected.
“The pace of growth of bank credit surpassed deposit growth in FY24, the data showed. In FY24, while deposits grew 13.5% to Rs 204.8 trillion, non-food credit grew 20.2% to Rs 164.1 trillion as on 22 March. In FY23, deposits grew 9.6% and credit 15.4%,” the newspaper reported.
The high credit-deposit ration points that the most of bank’s deposits have been used for loans. The financial daily newspaper claims that, “Data from RBI showed the credit-deposit ratio at its highest in at least 20 years as loan offtake rose across categories including home loans and other loans for consumption.”
Bhavik Hathi, managing director of consulting firm Alvarez and Marsal, told Livemint, “Customers are chasing high-return, equity linked-products.”
In the previous financial year, banks had hiked deposit rates to try and attract more money in this way. Despite such measures the flow of cash has remained unaffected.
“The pace of growth of bank credit surpassed deposit growth in FY24, the data showed. In FY24, while deposits grew 13.5% to Rs 204.8 trillion, non-food credit grew 20.2% to Rs 164.1 trillion as on 22 March. In FY23, deposits grew 9.6% and credit 15.4%,” the newspaper reported.
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