GENERAL27 Sept 2026
High credit-deposit ratio does not signal funding vulnerability: RBI report
An RBI staff report says a high credit-deposit ratio, or CD ratio, alone does not mean banks are short of funds. Loans themselves create deposits, so the ratio should be read with liquidity, capital and other prudential measures. This affects how you judge bank health. Don't treat one number as a warning sign; look at the full picture before you worry.
Key Statutory Highlights
- An RBI staff report says the credit-deposit ratio should not be viewed in isolation as a measure of banks' funding vulnerability.
- The report notes that loans themselves result in the creation of deposits.
- The RBI says the CD ratio should be assessed alongside liquidity, capital and other prudential indicators.
Actionable Advice for Taxpayers / Founders:If you track banking news for your business, avoid judging a bank's health from the CD ratio alone. It is safer to read it together with liquidity, capital and other prudential indicators, and to confirm your reading with your banker or a qualified advisor before acting on it.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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