At the start of FY21, private sector banks like Yes Bank and IDFC First Bank had a loan-to-deposit ratio greater than one. In March 2020, as Yes Bank was engulfed in a bad loan crisis, it had 1.6x more loans than deposits. By Q1FY22, its deposits increased by 39% YoY to Rs 1.6 lakh crore. This is higher than the deposits growth of the largest domestic bank, HDFC Bank, which had a deposit growth of 13% YoY in Q1FY22. HDFC Bank's loan book stayed flat at 0.85x its deposits book.

The loan-to-deposit ratio measures a bank's liquidity position. A high loan-to-deposit ratio (greater than 1) indicates that a bank has given out more loans than it has received deposits. This means that the bank might not have enough liquidity to cover customer deposits.