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Loan-to-Deposit Ratio (LDR)

Updated on 2023-08-29T11:57:14.675861Z

A loan to deposit ratio is used for calculating the ability of a lending institution to cover the withdrawals that are done by its consumers. The formula of loan to deposit ratio is defined as the loan divided by total deposits.

To maintain the normal daily operations, a lending institution must have certain measure of liquidity.

 

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