- India's Credit-Deposit ratio rose from 53% in 2000-01 to 82% by December 2025, indicating growth
- Incremental CD ratio often exceeded 100%, showing strong credit demand despite slow deposit growth
- Bank assets grew to 94% of GDP in FY25, up from 77% in FY21, reflecting post-pandemic recovery
With the financialisation of the economy, India's Credit-Deposit (CD) ratio has been increasing continuously since 2000-01 from 53% to 82% as of December 15, 2025, which signifies a better financial development and lead to strong economic growth, a report said on Monday.
The incremental CD ratio numbers, which crossed 100% in a number of instances, show the increasing demand for credit, despite lean deposits growth but banks honoured it by raising resources from other sources, an SBI Research Report said.
Besides, it said, Indian banks have exhibited strong post-pandemic balance sheet revival with bank asset growth rebounding sharply to 94% of the GDP as compared to 77% in FY21, reflecting renewed credit intermediation and financial deepening.
Deposits and advances expanded manifold over two decades, it said, adding, deposits surged from Rs 18.4 lakh crore to Rs 241.5 lakh crore and advances from Rs 11.5 lakh crore to Rs 191.2 lakh crore during FY05–FY25, signaling scale expansion of the banking system.
Faster in the case of advances, it said, CD ratio increased from 69% in FY21 to 79% in FY25.
Public Sector Banks' (PSBs) market share shows a continued revival after a secular decline since FY08, with PSBs gradually reclaiming market share, indicating balance sheet repair and renewed lending appetite.
CASA stability masked divergent trends across bank groups. While overall CASA ratios remained around 37%, private banks strengthened CASA shares whereas foreign banks witnessed erosion, it said.
The report further said, there is a gap between maturity profile of share of deposits and advances for 6 months to 1 year and 1-3 year time bucket and the 35% share of advances in 1-3 years bucket indicating increasing tendency of pre-payment among borrowers.
Unsecured advances expanded from Rs 2 lakh crore to Rs 46.9 lakh crore, with share rising to 24.5% in FY25 from 17.7% in FY05.
With regard to job creation, it said, banking employment nearly doubled over two decades with total employees increasing from 8.6 lakh to 18.1 lakh, with private banks accounting for 46% and PSBs 42%.
Officer share rose from 36% to 76% indicating skill intensification and preference for higher-value roles, it said.
Indian banks assets size has increased from merely Rs 23.6 lakh crore in FY05 to Rs 312.2 lakh crore in FY25, it said.
From 71% in FY08, the PSBs market share displayed secular decline in both deposits and advances but the latest data indicate that PSBs are reclaiming their advances market share.
PSBs accounted for half of the unsecured lending followed by Private Sector Banks, it added.
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