Worries over the slower growth in the current and savings account (CASA) deposit for Indian lenders are seen sustaining in the first quarter of the current financial year. This is visible among those who have reported their provisional numbers .
According to the Moneycontrol’s analysis of 8 banks who have released provisional numbers, three banks have reported a CASA growth between 2-7 percent, and two banks reported fall in CASA deposits on a quarterly basis.
The banks that have reported a fall in CASA deposits are Indian Bank and CSB Bank. Meanwhile, Tamilnad Mercantile Bank, South Indian Bank, and Karur Vysya Bank have reported a rise in CASA deposit.
However, all these banks have reported a 4-9 percent growth in CASA on a yearly basis.
The numbers
Karur Vysya Bank reported a provisional rise of 5.30 percent on-quarter and 4.51 percent on-year growth in CASA. Similarly, South Indian Bank reported a provisional rise of 7.33 percent on-quarter and 9.06 percent growth in CASA, and Tamilnad Mercantile Bank reported 4.51 percent and 1.75 percent, on-year and on-quarter growth in CASA, respectively.
CSB Bank reported a decline of 5.07 percent on-quarter and 14 percent on-year growth. Indian Bank’s savings account deposit fell 2.06 percent on-quarter and current account deposit fell 5 percent.
As per provisional numbers, Tamilnad Mercantile Bank reported CASA deposit of Rs 14,411 crore as on June 30, 2025, as compared to Rs 13,789 crore as on June 30, 2024.
Karur Vysya Bank reported a CASA deposit of Rs 29,306 crore as on June 30, 2025, as compared to Rs 27,832 crore as on March 31, 2025, and Rs 28,042 crore as on June 30, 2024.
AU Small Finance Bank’s CASA increased 2.7 percent on-quarter and 16.2 percent on-year. As per exchange filing, CASA deposits stood at Rs 37,240 crore as on June 30, 2025, as compared to Rs 32,035 crore as on June 30, 2024, and Rs 36,253 crore as on March 31, 2025.
Persistent Stress
In the last few quarters, banks have been struggling with deposit mobilisation, especially on the CASA front, due to unattractive interest rates for depositors as other financial products offered greater returns.
Even after this, banks have been able to manage the CASA deposit at competitive levels in Q4FY25. Banks, especially state-owned ones, were able to maintain the CASA ratio within the guided level or slightly lower, thanks to the introduction of innovative products.
Additionally, stress over CASA ratio has increased after the central bank started the rate-cutting cycle, leading to banks adjusting rates on these deposits. So far, the RBI has cumulatively cut 100 bps repo rate to support growth.
Analysts said that stress on the CASA deposits will persist for a longer period because these deposits will continue to pay lower rates and depositors may chose high yielding financial products.
Deposit and advances growth
Banks have reported a 8-16 percent on-year growth in deposit in June quarter, as per provisional numbers.
On the advances front, banks reported a 9-36 percent growth on a yearly basis.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
