Increase in credit deposit ratio may lead to higher loan rates
By Joseph Samson
Oct 4, 2013
Print    Email    RSS   

There are high chances for the rates of lending and deposit to rise more as a major indicator of the lending and resources have reached the highest point in the banking sector building hopes of easing the pressure of loan repayment at any time.

The CDR, meaning credit to deposits ratio, reached its all time highest at 78.25%. This indicated that banks borrowing funds from the market for the purpose of advancing loans rather than borrowing it from lesser-cost deposits in order to advance them as loans for working capital and projects. With such high CDR, banks are lending Rs 78.50 against every Rs 100 deposit. On the other hand, if reserve requirements are altered liquidity ratio to 23% and CRR to 4% then CDR must not exceed 73%. According to RBI reports, outstanding CDR on 6th September, 2013 in the banking sector reached 78.52%. With lower growth rate of deposits, the increasing CDR has gone up to 83%, implying for every Rs 100 deposit, the banks are lending Rs 83.

(Comments Posted : 0) Post Your Comments
Show All Comments
 Select a product:

 Select a product:

Choices available for home buyers
If the interest rate is same, how do you...
Joint Home Loan: A wise decision for a...
IBA to push for MIBOR as the benchmark rate
Income Tax Benefits on Joint Home Loans

PINJORE: CaℒL Giℛℒs In PiNjOrE 09915787550...
PINJORE: CaℒL Giℛℒ In PiNjOrE 09915787550...
how to gate my home loan certificate

Canara Bank earned a profit of 60%. Feb 6, 2015
New Branch of Laxmi Vilas bank at Vijayawada Jan 30, 2015
Home loan EMIs expected to drop down Jan 21, 2015
Corporation Bank received MSME banking excellence award 2014 Jan 19, 2015
Home loan rates set to fall, after reduction in repo rate Jan 16, 2015
News Archive