New Delhi: According to a CareEdge research, credit offtake and deposit expansion have slowed following the Reserve Bank of India's (RBI) 100 basis point repo rate decrease since February.
Despite the rate decrease and banks lowering deposit rates, deposit expansion continues to surpass credit offtake this fortnight.
According to the report, credit offtake and deposit growth have slowed, with deposit growth still exceeding credit offtake in the current fortnight.
According to the report, deposits decreased by 0.44 percent sequentially, reaching Rs 230.7 lakh crore as of June 13, 2025, lower than the 12.1 percent increase (excluding merger effect) reported last year.
This decrease was driven by banks' reliance on certificate of deposits to fulfill funding needs, despite weak deposit growth, as competition intensified in the wholesale deposit segment.
Additionally, credit offtake totaled Rs 183.1 lakh crore, representing a year-on-year increase of 9.6 percent, considerably slower than last year's rate of 15.5 percent.
The slower expansion in credit offtake can be ascribed to a strong base effect and subdued growth across sectors, including retail.
The ShortTerm Weighted Average Call Rate (WACR) fell to 5.27% on June 20, 2025, down from 6.68% on June 21, 2024. According to CareEdge, the drop comes after the Reserve Bank of India's (RBI) three consecutive repo rate decreases and liquidity infusion.
Furthermore, the Credit Deposit (CD) ratio saw a small increase, but it remained under the 80% threshold for six consecutive fortnights. The increase in CD ratio was due to deposit outflow, as opposed to a rise in credit oftake of Rs 0.59 lakh crore in the current fortnight.
According to the report, overall government investments of Rs 66.9 lakh crore represent a year-on-year increase of 7.4%, but a sequential decrease of 0.2%.
According to the report, the credittototalassets ratio fell slightly to 69.4%, and the Government Investmenttototalassets ratio also decreased to 25.3% for the two-week period ending June 13, 2025.
