Private Banks Pare CD Ratios Amid Tight Liquidity

Tackling Credit Risk

- SACHIN KUMAR

PRIVATE BANKS HAVE pared their credit-deposit (CD) ratios as they focus on a deposit growth higher than advances amid tight liquidity conditions.

The average CD ratio, also known as loan-to-deposit ratio (LDR), has decreased to 90.74% at the end of the December quarter of the current financial year from 94.4% in the same period of FY24, according to data from Capitaline. However, the average CD ratio of public sector banks, which was relatively lower than that of private lenders, increased to 77.8% in the third quarter of FY25 from 76% in the same quarter of FY24.

HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Yes Bank, and IDFC First Bank are among the major private lenders that have seen a year-on-year (y-o-y) decline in their CD ratios.