Credit-deposit growth gap widens amid tight liquidity, shows RBI data

While credit expanded by Rs 1.38 trillion in the March 7 fortnight over the previous fortnight, deposits expanded by Rs 2.25 trillion

Banking credit in the economy grew by 11.1 per cent year-on-year (Y-o-Y) in the fortnight ended March 7, while deposits grew at 10.2 per cent during the same period, which is a gap of around 90 basis points (bps), according to the latest data from the Reserve Bank of India (RBI).

 

However, on an absolute basis, deposits increased by ₹2.25 trillion over the previous fortnight, while credit grew by ₹1.38 trillion. As of March 7, outstanding deposits stood at ₹181.28 trillion, while outstanding credit reached ₹225.10 trillion.

 

With liquidity remaining tight and deposit mobilisation under pressure, banks are refraining from