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After deposit growth outpaced credit offtake for the first time in the last 30 months some days back, the credit and deposits are now growing in line with each other, according to a report on Tuesday. 

Credit offtake increased by 9.3 per cent to reach Rs 174.4 lakh crore (as of November 1) compared to December.

The growth slowdown compared to last year can be attributed to a higher base effect due to the merger and RBI measures such as higher risk weights and the proposed LCR norms, according to a CareEdge Ratings report.

Deposits rose at 9.8 per cent to stand at Rs 220.4 lakh crore as of November 1. This growth can be attributed to rising term deposit rates of scheduled commercial banks (SCBs).

The short-term Weighted Average Call Rate (WACR) has decreased to 6.50 per cent as of November 1, compared to 6.77 per cent as of November 10, 2023, indicative of surplus liquidity.

In absolute terms, over the last 10 months, credit offtake expanded by Rs 14.6 lakh crore, reaching Rs 174.4 lakh crore as of November 1.

Meanwhile, in absolute terms, deposits have expanded by Rs 20.6 lakh crore over the last 10 months.

“Deposits have remained prominent in FY25 as banks have intensified efforts to strengthen their liability franchise and have offered higher term deposit rates. Additionally, banks are sourcing funds via the certificates of deposits at a relatively higher cost,” the report mentioned.

“The CD ratio has been hovering around 80 per cent since September 2023. The CD ratio witnessed a marginal sequential uptick reaching 79.1 per cent for the fortnight ending November 1, 2024,” the report mentioned.

On year-on-year performance, credit saw a growth of 11.8 per cent, slower than the last year’s rate of 20.4 per cent. Meanwhile, deposits saw a growth of 11.9 per cent, compared to 13.5 per cent last year.