New Deposits Beat Loans in '24

Banks add over ₹2 trillion more in deposits than loans last year, leading to softening of credit-deposit ratio

- Shayan Ghosh

Banks in India added more deposits than loans in 2024, leading to a softening of the credit-deposit ratio, even as deposit growth failed to keep pace with advances, showed latest data from the Reserve Bank of India.

The gap between deposits and non-food credit widened to over ₹2 trillion last year, higher than ₹1.3 trillion in 2023. Non-food credit is bank credit adjusted for loans given to the Food Corporation of India (FCI). In 2022, per RBI data, the gap between deposits and loans was ₹2.6 trillion. Data for 2023 exclude the impact of the HDFC Ltd and HDFC Bank merger that added to the banking sector's loans and deposits.

Lenders faced a deposit crunch in 2024 as credit growth outstripped the rise in deposits. While credit growth cooled subsequently, credit still outstripped deposits in December.