India banks face funding squeeze amid rising credit growth
India's banks are experiencing a funding squeeze as credit growth outpaces deposits, with the credit-deposit ratio nearing 97% by January 2026. Aggregate credit grew 12.2% compared to 10.2% in deposits, prompting banks to adjust their funding strategies.
after close1 source ↓written by the desknot a recommendation
- credit-deposit ratio reached
- 97%
- 82.3%
- Aggregate deposits grew
- 10.2%
- while credit expanded
- 12.2%
- credit growth hitting
- 14.6%
The surge in bank credit growth is now outpacing deposit accretion, pressuring system liquidity. By January 2026, the credit-deposit ratio reached 97%, up from 82.3%. Aggregate deposits grew 10.2%, while credit expanded 12.2%, with year-on-year credit growth hitting 14.6%. This trend compels banks to manage funding costs to sustain profitability.
Not investment advice. For informational purposes only.