Scheduled commercial banks (SCBs) are under increasing pressure to mobilise large deposits because the incremental credit-deposit (C-D) ratio has reached 98 per cent. The ratio is usually less than 80 per cent, as banks are required to maintain a cash reserve ratio of 4.5 per cent and a statutory liquidity ratio (SLR) of 18 per cent on their deposits. Banks usually hold excess SLR securities, allowing them to sustain the incremental C-D ratio above 77.5 per cent as long as these excess securities are available.

Before the current tightening in monetary policy began in May 2022, credit

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Root of C-D mismatch: Major banks aren't competing for savings deposits

The savings bank deposit interest rate was the last one to be deregulated by the RBI after all other interest rates were deregulated