As deposit growth lags credit demand, banks are raising FD rates — but whether that's enough to win depositors back from competing investments remains the big question.
CREDIT-DEPOSIT MISMATCH
Everyone wants a loan—for cars, homes, or businesses. But banks need deposits to match credit demand. The Credit-Deposit (CD) ratio is now at a 20-year high of 82%. So, for every ₹100, banks have already lent out ₹82. After the mandatory reserves they keep with the RBI, there’s very little spare cash left behind.
WHERE IS THE MONEY GOING?
Between FY20 and FY25, the number of unique equity investors exploded from 31 million to over 110 million. Indian households have realised that FDs do not build wealth and are shifting to equities and investment funds.
RBI PRESSURE
When RBI cuts the repo rate, interest rates on deposits are slashed further, making them even less attractive.
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