Credit-Deposit (C-D) Ratio of Commercial Banks and Cooperative Banks in Odisha: An Empirical Study

The Credit-Deposit (C-D) ratio is generally accepted as an significant measure of the efficacy of the banks, as it represents how well financial institutions convert mobilized deposits into credit for productive use. This study investigates the long-run trajectory and the comparative performance of the Commercial Banks and Cooperative Banks in Odisha from 1999-2000 to 2022-2023. The study draws just using the secondary data gathered from official sources for instance the RBI and NABARD. In order to record the both trend and variation, the research uses descriptive statistical analysis, compound annual growth rate (CAGR) estimation, and inferential techniques, such as the independent sample t-test and the ANOVA, along with graphical presentations. The results emphasize a pronounced structural divergence in Odisha’s banking sector. The Cooperative Banks have continuously stated C-D ratios beyond 100 percent—attaining152.82as a maximum of in 2006-07—while demonstrating comparatively low variability (CV = 11%), a indication of their regional lending practices and orientation focus on the rural areas. The Commercial Banks, in contrast, show increased instability (CV = 20.4 percent), with ratios varying between 42.92 in 1999-2000 and a high of 86.05 in 2012–13, before decreasing to near 50-55 recently. CAGR estimates show quicker expansion in the Commercial Banks (1.98percent) than in the Cooperative Banks (0.34percent), although the latter exhibit more intensive deployment of the deposits inside the state economy. Tests of statistics affirms that the variations in the mean C-D ratios in between the two groups are significant (p < 0.01), emphasizing systemic asymmetry. These findings propose that while the Cooperative Banks play a vital role in in favour of expanding rural credit, their very high C-D ratios may indicate financial stress and the exposure to risk. on the contrary, the Commercial Banks’ tendency to underutilize deposits depicts the phenomena of the credit migration, where resources are available locally are diverted outside Odisha, limiting local development of the economy. In order to address certain difficulties, the research suggests closer regulatory supervision by the RBI and SLBC to guarantee higher credit deployment by the Commercial Banks inside the state, in addition to infusion of capital, reforms in governance, and modernising of the digital of the Cooperative Banks to strengthen resilience. Furthermore, better the financial inclusion endeavour is essential to increase credit access in neglected areas, develop deposit mobilization, and augment the potential of the regional economy to take in credit. Simultaneously, these measures can assist the banking system in Odisha evolves in the direction of greater balance, the growth that is sustainable and inclusive in nature.