RBI says high credit-deposit ratio is not a funding risk signal
In short
The RBI said a high credit-deposit ratio does not automatically mean a bank is weak on funding. It said loans can create deposits, and the ratio should be checked with liquidity, capital and other safety measures.
This matters for banks and investors watching lending trends. The reporting does not name any bank or give a specific ratio level.
What the reporting says
The RBI said a high credit-deposit ratio does not by itself signal funding vulnerability, according to the reported note. The report said loans create deposits and that the CD ratio should be read alongside liquidity, capital and other prudential indicators. The reporting does not name any banks or give a threshold level.
Why it matters
The RBI report argues that the credit-deposit ratio should not be judged in isolation. It says loans themselves create deposits and that the ratio must be assessed with liquidity, capital and other prudential indicators. The report does not identify any specific banks, so the effect is general rather than tied to one institution.