As of September 5, 2025, credit offtake stood at Rs 188 lakh crore, reflecting a 10.3 per cent year-on-year rise, majorly due to credit expansion to MSMEs.
Deposits rose by 9.8 per cent y-o-y and increased marginally by 0.7 per cent over the past fortnight. (Source: reuters)
India’s credit growth has outpaced deposit growth in the current fortnight, even as the overall credit offtake remains substantially lower compared to the same period last year, CareEdge Ratings said on Monday. Meanwhile, deposit growth has slipped below the 10 per cent mark, marking the first such decline in the past three months.
As of September 5, 2025, credit offtake stood at Rs 188 lakh crore, reflecting a 10.3 per cent year-on-year rise, majorly due to credit expansion to MSMEs. Additionally, large corporates have shifted some part of their borrowings to banks due to higher yields in the bond market.
This growth was substantially lower than the 13.4 per cent growth recorded in the previous year (excluding merger impact), attributed to a high base effect, slower lending to corporates, and reduced lending to NBFCs.
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On the other hand, deposits rose by 9.8 per cent y-o-y and increased marginally by 0.7 per cent over the past fortnight, reaching Rs 236.7 lakh crore as of September 5, 2025. However, they remain lower than the 11.2 per cent growth (excluding merger impact) seen last year.
Time deposits grew by 8.8 per cent year-on-year to Rs 207.8 lakh crore, accounting for 88.7 per cent of the total deposits, and slowing from 11.1 per cent growth in the same period last year. Demand deposits, on the other hand, increased by 17.7 per cent y-o-y to Rs 28.9 lakh crore, making up 12.3 per cent of the total deposits.
The divergence between credit and deposit growth comes amid tighter liquidity conditions in the banking system, which recently fell to a three-month low due to advance tax and GST outflows. While liquidity is expected to ease in October with the next tranche of the RBI’s cash reserve ratio cut and higher government spending, deposit mobilisation is expected to remain a key monitorable.
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Credit demand from MSMEs and retail borrowers is also projected to pick up during the festive season, with early estimates pointing to a sharp increase in applications from small businesses seeking short-term working capital.
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