CASA will become a meaningful metric only if the bank holds a large chunk of HNI or Corporate accounts. This is where the foreign banks like Standard Chartered and erstwhile Citi bank had an edge. If the majority of the accounts are from mid to low income group or salary accounts (as it is for most big Indian private banks), the outflow happens quickly for loans, EMIs and the balance is negligible. Indian banks should shift focus and target the turf hold by foreign banks to improve the CASA. While the cost of funds may be slightly higher, FDs and RDs still play a significant role on the asset side of any banking franchise.
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