Q.A district in Manipur has plenty of bank deposits but a very low credit–deposit ratio. What does this indicate, and why might it happen in a hill state?

The credit–deposit ratio compares how much a region lends against how much it saves, so a low value is a warning sign about local lending.

What the CD ratio shows. The credit–deposit (CD) ratio is the proportion of deposits that banks lend out as credit in an area. A high CD ratio means most local savings return to the area as loans; a low CD ratio means the opposite — deposits are mobilised but not lent back locally.

What a low ratio indicates in this district:

• Local savings are flowing out rather than financing local farms, shops and enterprises.
• Credit is not reaching households and businesses that could use it — a sign that inclusion is incomplete on the credit side even if accounts (the access side) exist.

Why it happens in a hill state like Manipur:

• Limited investment opportunities and small local markets reduce demand for large loans.
• Difficult terrain and weak connectivity raise costs and risks, making banks cautious about lending.
• Lower financial literacy and unfamiliarity with formal borrowing dampen credit demand.
• Some borrowers still rely on informal credit. …

Reading a low CD ratio as ‘not enough deposits’. It is the reverse — deposits exist but too …