Casa deposit growth sluggish in FY13
Between April 2012 and January end, the demand deposits in the banking system have shrunk 7%. RBI data suggest overall deposit growth has been weak at 6.78% in the same period, compared with 10.8% in the corresponding period last year. Time deposits have fared better than Casa deposits having grown by 9%, as compared with 10% in the corresponding period last year. Time deposits are those that are locked in with the bank for a certain fixed tenure and banks pay a higher interest on them than on demand deposits, which can be withdrawn anytime.
Bigger banks like Bank of Baroda saw domestic Casa growing just at 2% in the first nine months of FY13, and its domestic net interest margins (NIMs) have come down 36 basis points (bps) to 3.08% since January-March quarter in FY12. Punjab National Bank saw NIMs declining to 3.47% in the third quarter from 3.5% in the preceding quarter. HDFC Bank also witnessed a 10 bps sequential fall in margins to 4.1% because of the 50 bps sequential drop in its Casa ratio.
In the fortnight to January 25, 2013 overall banks’ deposits grew at 13.08% year-on-year (y-o-y) to R65,27,117 crore. In the second quarter review, RBI had projected deposit growth of 15% for FY13.
State Bank of India (SBI) chairman Pratip Chaudhuri said tax-saving instruments were proving to be a
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