India’s banking system has seen strong credit growth in recent years, but a new SBI Research report shows that this growth is not evenly spread across the country. While some regions get large amounts of bank loans, others are being left behind.
The report looks at the credit-deposit (CD) ratio, which shows how much banks lend compared to the deposits they collect. At the national level, the CD ratio has risen steadily from about 69% in 2020–21 to nearly 80% in 2024–25. This means banks are lending more of the money they receive from depositors.
However, this overall number hides big regional differences. Southern and western India dominate bank lending, with average CD ratios above 90%. In contrast, eastern and northeastern states have CD ratios below 50%, showing much lower credit use and weaker access to formal finance.
Large eastern states such as Odisha, Bihar, Jharkhand, and West Bengal continue to report CD ratios below 52%. This is despite these states having large deposit bases. The report says this points to problems in credit absorption, investment activity, and overall economic development.
On the other hand, some southern states show very high lending levels. Tamil Nadu has maintained a CD ratio above 100% for more than a decade. Andhra Pradesh recorded a sharp rise, with its CD ratio crossing 150% in 2024–25. This means banks there are lending far more than the deposits they collect locally.
Across India, 226 districts have CD ratios below 50%, while 75 districts have ratios above 150%. Nearly half of all districts fall in the 50–100% range, with southern India having a larger share of high CD ratio districts.
SBI Research said these gaps reflect long-standing differences in economic activity and investment climate. Less developed and rural regions often see their deposits flow to more advanced states.
The report warned that while rising CD ratios show strong loan demand, very high levels can strain bank liquidity and increase dependence on market funding. Improving credit flow in lagging regions will need better investment conditions and stronger local economies.
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