India Banking - Credit-Deposit Ratio At Its Lowest; Spreads Have However Improved: Dolat Capital

India Banking - Credit-Deposit Ratio At Its Lowest; Spreads Have However Improved: Dolat Capital

An employee holds a stack of electronic payment receipts and Indian Rupee banknotes at a BPCL fuel station in Bengaluru. (Photographer: Dhiraj Singh/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Dolat Capital Report

Deposit growth continues to outpace credit growth by a wide margin, aiding system liquidity.

Deposit growth has remained ~4% higher than credit growth for almost a year now and this has pushed down the credit-deposit ratio by over 5% to its lowest in a decade (excluding of demonetisation period).

Consequently, excess liquidity parked with the Reserve Bank of India under the reverse-repo has further increased in recent months.

Weak demand, impact of lockdowns, and risk aversion has limited growth thus far.

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Dolat Capital Bankig Report.pdf
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