Deposits must become attractive to households again so that banks are not left scrambling
Nonetheless, tepid growth in current and savings account deposits has sustained in the April-June quarter.
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.
The demand for SLR comes after the RBI has cut cash reserve ratio by 100 basis points to improve liquidity
K. Satyanarayana Raju, MD and CEO of Canara Bank, said in an interview with Moneycontrol that the yield on corporate loans is likely to ease by 10–15 basis points in the coming months due to the RBI rate cut.
Bank’s cost of deposit was 5.8 percent in Q1, which is presently 5.9 percent, change of just 10 bps primarily because of the change in the composition of the deposit, Samra said
"Cost of employee to bank is very high in PSBs. The public sector banks must enhance their operational efficiency and reduce costs by leveraging AI and technology," the official added.
Small banks showed a steep fall in CASA ratio while large lenders such as HDFC Bank and ICICI Bank showed a modest reduction