India Credit Cycle Clock

Formula

Quadrant = f(Credit Growth YoY, Credit-Deposit Ratio) vs 10-yr RBI averages

• Credit Growth YoY – Scheduled commercial bank non-food credit (RBI DBIE)
• Credit-Deposit Ratio – Total bank credit / total deposits
• Repo Rate – RBI policy rate for phase calibration

Why It Matters

India's credit cycle is best read as a two-axis clock: how fast credit is growing versus how leveraged the banking system's deposit base already is. Expansion phases feature rising credit growth with manageable CD ratios; downturn phases show credit deceleration with elevated CD ratios — a classic RBI tightening setup. This bridges monetary policy signals to real-economy transmission.

Institutional Use

EM macro desks and India-focused allocators use credit-cycle phase mapping for RBI policy inflection calls. The framework mirrors BIS credit-gap methodology adapted to India's high-frequency RBI weekly data. Complements Loan-to-Job Efficiency for credit productivity surveillance.

How to Read It