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Bank Deposit Growth Soars to 15-Year High, Moderating CD Ratio: RBI Bulletin
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Moneycontrol•25-09-2026, 22:43
Bank Deposit Growth Soars to 15-Year High, Moderating CD Ratio: RBI Bulletin
- •Bank deposit growth in August reached its highest level in 15 years, contributing to a moderation in the incremental credit-deposit (CD) ratio, according to the RBI's September bulletin.
- •The incremental CD ratio, which peaked at around 114 percent in May 2027, has since declined, potentially due to an influx of foreign currency non-resident bank (FCNR-B) deposits.
- •The RBI's special swap window for FCNR-B deposits resulted in inflows of up to $133 billion by August 31, when the swap window closed.
- •System liquidity remained in surplus in August and increased in early September due to the FCNR-B swap facility, moderating later in the month due to tax outflows.
- •Stronger deposit growth has accelerated money supply growth, while bank credit growth remains robust and broad-based, driven by industrial advances and FDI.
Key Questions Answered
The RBI bulletin noted that the moderation in the incremental credit-deposit ratio could be due to an influx of foreign currency non-resident bank (FCNR-B) deposits.
The special swap window for three- and five-year FCNR-B deposits resulted in inflows of up to $133 billion as of August 31, when the window closed.
According to the RBI, bank credit growth remained broad-based in July, driven by a pickup in industrial advances and foreign direct investment (FDI).
