Cd Ratio Calculator

To calculate the CD ratio, divide the total amount of advances (loans) by the total amount of deposits. The CD Ratio Calculator (Credit-Deposit Ratio Calculator) is a key financial tool used in banking to measure a bank’s efficiency in utilizing deposits for lending.

It provides insight into the bank’s financial health and profitability. A high CD ratio indicates aggressive lending, while a low ratio may suggest underutilization of funds. The ideal CD ratio varies but is typically around 60-75%, depending on regulatory and operational benchmarks.

Formula:

Contents

1 Formula:
2 Solved Calculations:
3 What is the CD Ratio Calculator?
4 Final Words:

$CDR = \frac{TA}{TD}$

Variable	Description	Unit
$CDR$	Credit-Deposit Ratio	Percentage (%)
$TA$	Total Advances (loans given)	Currency unit
$TD$	Total Deposits	Currency unit

Solved Calculations:

Example 1: Calculate CD Ratio for Total Advances = $500,000 and Total Deposits = $1,000,000

Step	Value	Explanation
Total Advances ( $TA$ )	$500,000 \, \text{USD}$	Given
Total Deposits ( $TD$ )	$1,000,000 \, \text{USD}$	Given
Calculation	$CDR = \frac{500,000}{1,000,000} \cdot 100$	Divide advances by deposits and multiply by 100
Result	$CDR = 50\%$	Credit-deposit ratio

Example 2: Calculate CD Ratio for Total Advances = ₹7,500,000 and Total Deposits = ₹10,000,000

Step	Value	Explanation
Total Advances ( $TA$ )	$7,500,000 \, \text{INR}$	Given
Total Deposits ( $TD$ )	$10,000,000 \, \text{INR}$	Given
Calculation	$CDR = \frac{7,500,000}{10,000,000} \cdot 100$	Divide advances by deposits and multiply by 100
Result	$CDR = 75\%$	Credit-deposit ratio

What is the CD Ratio Calculator?

The CD Ratio Calculator is a valuable tool that computes the Credit-Deposit (CD) Ratio, an essential metric in banking and financial analysis. The CD Ratio measures the proportion of a bank’s loans (credit) to its deposits, indicating how effectively a bank is utilizing its deposits to generate credit.

To calculate the CD Ratio, you divide the total credit disbursed by the total deposits and express it as a percentage. For example, if a bank has disbursed loans worth ₹80 crores and holds deposits worth ₹100 crores, its CD Ratio is 80%.

The tool ensures quick and accurate calculations, whether you’re analyzing data for a single branch or across multiple locations.

This calculator is helpful for banking professionals, policymakers, and analysts assessing a bank’s liquidity and lending efficiency. It also supports related tasks like determining the ideal CD Ratio for regulatory compliance (as recommended by RBI or other authorities), or creating financial reports in platforms like Excel.

The tool can address queries such as how much CD Ratio is good, what is the formula for CD Ratio, and how to maintain an appropriate balance between loans and deposits.

Final Words:

In essence, the CD Ratio Calculator is an indispensable resource for evaluating a bank’s credit efficiency and financial stability. It simplifies complex calculations, making it a reliable tool for professionals in the banking and financial sectors.