Data from the Reserve Bank of India (RBI) showed the credit-deposit ratio at its highest in nearly 20 years, as loan offtake rose across categories including home loans and other loans for consumption.
At 80%, the credit-deposit or CD ratio is at its highest since 2005, the earliest period for which data is available.
The CD ratio indicates how much of a bank's deposit base is being utilized for loans. The FY24 data is up to 22 March, the last fortnight for the previous fiscal year.
"Customers are chasing high-return, equity-linked products," said Bhavik Hathi, managing director of consulting firm Alvarez and Marsal, adding that the solid performance of equity markets in the past few months and rising financial literacy have encouraged investors to put in money into such securities for higher returns.
Banks hiked deposit rates last fiscal year to draw in retail deposits, as they faced competition from peers, other investment avenues, and some shift in preferences from financial assets towards real assets.
Esta historia es de la edición April 09, 2024 de Mint Mumbai.
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Esta historia es de la edición April 09, 2024 de Mint Mumbai.
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