Mumbai, Jan. 3 -- Indian banks lent more money in 2025 than they gathered through deposits in the year, as low deposit rates and investors' preference for other instruments weighed on inflows.

This has sent the system's incremental credit-deposit (CD) ratio-which tracks fresh loans and deposits during the year-soaring to 102% in 2025 from 79% a year earlier. A CD ratio above 100% implies that banks are lending more money than the incremental deposits they are mobilising.

The widening CD ratio is forcing banks to lean increasingly on market borrowings, liquidation of excess statutory liquidity ratio (SLR) holdings, and balance-sheet buffers to raise money for lending, three bank executives said on condition of anonymity.

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