Wedge between deposit growth and credit growth may continue with geo-political risks: SBI Research
BusinessLine 18 hrs ago·20 Jul 2026, 5:14 am
SBI Research has flagged a widening gap between the money banks are collecting as deposits and the loans they are giving out. This trend is expected to persist due to ongoing geopolitical tensions, which are making investors hesitant to invest in the market and prefer keeping their funds safe in bank deposits instead.
For investors, this shift in savings behavior is significant. It suggests that banks may face a liquidity crunch, which could eventually lead to higher interest rates on loans. This environment can squeeze corporate profit margins, as companies might have to pay more to borrow money, potentially impacting their financial performance.
Investors should monitor the credit-to-deposit ratio in the coming months. If the gap continues to widen, it could signal a slowdown in economic activity. Keeping an eye on how banks manage this liquidity and the resulting impact on corporate borrowing costs will be crucial for understanding the market's direction.
Key takeaways
- Category: Economy.
- Flagged as a high-impact, market-moving story.
Why it matters
This is a high-impact development and could move the stock. Use the price and stock snapshot to gauge how the market is responding.
