Southern Banks Maintain High Credit-Deposit Ratios Amid Growth Push

Scheduled commercial banks operating in three southern states are maintaining credit-deposit ratios above 100 per cent, signalling aggressive lending momentum in the region even as national averages remain elevated. Data indicates the aggregate CD ratio for banks nationwide crossed the 80 per cent threshold during FY26 and sustained levels above this mark through October 15 of the current fiscal year.

The elevated ratios in southern states suggest strong credit demand and lending activity in India's economically dynamic southern region, where industrial and services sectors continue to show growth momentum. Banks have been actively deploying deposits into lending, a trend that reflects confidence in credit quality and borrower capacity to service advances.

Maintaining CD ratios above 100 per cent indicates that outstanding advances exceed available deposits, requiring banks to tap external funding sources and inter-bank borrowing markets. While such ratios demonstrate active deployment of capital, regulatory authorities typically monitor these metrics to ensure banks maintain adequate liquidity buffers and comply with statutory requirements.

The sustained high CD ratios come as the Reserve Bank of India continues to calibrate monetary policy and liquidity conditions across the banking system. The performance in southern states underscores regional variations in credit flows, with these geographies demonstrating particular strength in absorbing banking sector credit expansion.