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According to a study released on Tuesday, credit and deposits are currently rising in tandem after deposit growth surpassed credit offtake for the first time in the last 30 months a few days ago.

Compared to December, credit offtake climbed 9.3% to Rs 174.4 lakh crore (as of November 1).According to a CareEdge Ratings assessment, the merger’s greater base impact and RBI policies like the planned LCR rules and increased risk weights are to blame for the growth slowdown when compared to the previous year.

As of November 1, deposits have increased 9.8% to Rs 220.4 lakh crore. Scheduled commercial banks’ (SCBs’) increasing term deposit rates are the cause of this expansion.As a sign of excess liquidity, the short-term Weighted Average Call Rate (WACR) dropped from 6.77 percent on November 10, 2023, to 6.50% on November 1.

As of November 1, credit offtake has increased by Rs 14.6 lakh crore in absolute terms over the previous ten months, to Rs 174.4 lakh crore.Over the last ten months, deposits have increased by Rs 20.6 lakh crore in absolute terms.

Because banks have increased their efforts to fortify their liability franchise and have provided higher term deposit rates, deposits have remained significant in FY25. Furthermore, the survey noted that banks are obtaining cash at a comparatively greater cost via certificates of deposit.

Since September 2023, the CD ratio has been in the 80 percent range. For the two weeks ending November 1, 2024, the CD ratio saw a slight sequential increase, rising to 79.1%, according to the study.