Rural Bank Credit and Deposit Growth Lags, RBI Data Shows
Why in the news
RBI figures for 2000 to 2025 showed scheduled commercial banks (SCBs) finding rural lending and deposit mobilisation harder than in other areas.
Key facts
- Faster city and metro loan growth came mostly from retail loans (home, vehicle, personal).
- The credit-deposit ratio (CDR) shows what share of deposits banks lend out.
- Urbanisation: urban share of population 28% (2000) to 37% (2024); rural share 72% to 63%.
| Area | Deposit growth, 2000-2025 |
|---|---|
| Metropolitan | 36 times |
| Urban | 26 times |
| Semi-urban | 22 times |
| Rural | 20 times |
About scheduled commercial banks
- Banks in the Second Schedule of the RBI Act, 1934; they can borrow from RBI and use clearing facilities.
- Include public, private and foreign banks plus Regional Rural Banks.
- Section 42(6) eligibility: at least ₹5 lakh paid-up capital and reserves, depositor-friendly business, and ability to comply with RBI and banking laws.
Exam angle
- SCB legal basis: Second Schedule, RBI Act, 1934.
- Fastest deposit growth: metros.