Indian Banks See Rising Credit-to-Deposit Ratios Amid Evolving Regulatory Context

Indian public sector banks (PSUs) maintain lower loan-to-deposit ratios compared to private banks, with SBI's ratio around 73-74%, indicating room for credit growth. Meanwhile, the overall banking sector's credit-to-deposit ratio has recently exceeded 80%, surpassing traditional thresholds based on reserve requirements. Experts suggest that despite rising ratios, regulatory norms remain intact and the relevance of the 80% benchmark is being reconsidered amid evolving banking practices and reduced reserve mandates.