Banking Sector CD Ratio Surges Past 80% Amid Festive Lending Boom

In a noteworthy development for the banking industry, the credit-to-deposit (CD) ratio has climbed beyond the 80% threshold, reflecting a strong demand for loans, as highlighted in a CareEdge Ratings report. As of October 2025, the ratio soared to 80.4%, marking a significant uptick compared to the previous fortnight.

This surge underscores a sharp credit offtake, driven by seasonal festive demand, GST rate cuts, and increased activity in retail and MSME sectors. However, the robust lending has triggered concerns about liquidity, as banks now have less than 20% of deposits available as reserves for sudden withdrawals or fresh loan requests.

On the deposit side, aggregate deposits amounted to Rs238.8 lakh crore, a 9.5% annual rise but down 1% sequentially due to festive withdrawals. While time deposits make up a substantial portion of total deposits, their growth has slowed year-on-year. Meanwhile, the overall credit offtake reached Rs192.1 lakh crore, matching last year's growth, bolstered by vehicle financing and corporate borrowing amidst higher bond yields.