India's Credit-Deposit Ratio Hits 82%, Signaling Strong Economic Uptick
Overview
India's Credit-Deposit (CD) ratio climbed to 82% by December 15, 2025, up from 53% in 2000-01, indicating robust financial development and expected economic growth. A recent SBI Research report highlights a strong post-pandemic revival in bank balance sheets, with assets growing significantly. Deposits and advances have expanded manifold, reflecting increased credit demand and a deepening financial system.
Economic Growth Signal
India's Credit-Deposit (CD) ratio has surged to 82 percent as of December 15, 2025, a substantial leap from 53 percent recorded in 2000-01. This continuous upward trend, according to an SBI Research report, signals enhanced financial development and portends strong economic growth for the nation. The report noted that while deposit growth has been lean at times, banks have met increasing credit demand by securing resources from alternative sources, pushing the incremental CD ratio above 100 percent on several occasions.
Banking Sector Revival
Indian banks have demonstrated a powerful post-pandemic balance sheet recovery. Bank asset growth has rebounded sharply, reaching 94 percent of the GDP compared to 77 percent in fiscal year 2021. This revival underscores renewed credit intermediation and a deepening of financial services across the economy.
Deposit and Advance Trends
Over the past two decades, deposits and advances have expanded significantly. Deposits grew from ₹18.4 lakh crore to ₹241.5 lakh crore, while advances surged from ₹11.5 lakh crore to ₹191.2 lakh crore between FY05 and FY25. The CD ratio itself saw a notable increase from 69 percent in FY21 to 79 percent in FY25, driven by faster growth in advances.
Public Sector Banks' Resurgence
Public Sector Banks (PSBs) are steadily reclaiming their market share after a prolonged decline since FY08. This comeback indicates successful balance sheet repair and a renewed appetite for lending. While overall CASA ratios have stabilized around 37 percent, private banks have increased their CASA share, whereas foreign banks have seen an erosion.
Evolving Credit Landscape
The report also identified a maturity mismatch between deposits and advances, particularly in the 6-month to 3-year buckets. The significant share of advances in the 1-3 year bracket suggests a growing tendency for borrowers to prepay loans. Furthermore, unsecured advances have ballooned from ₹2 lakh crore to ₹46.9 lakh crore, increasing their share in total advances to 24.5 percent in FY25 from 17.7 percent in FY05.
Employment Growth
Banking employment has nearly doubled over the last two decades, with the total workforce expanding from 8.6 lakh to 18.1 lakh. Private banks now account for 46 percent of this workforce, with PSBs contributing 42 percent. The proportion of officers has risen from 36 percent to 76 percent, reflecting a shift towards higher-value roles and increased skill intensity within the sector. The total assets of Indian banks have grown from ₹23.6 lakh crore in FY05 to ₹312.2 lakh crore in FY25.
