In a remarkable trend, Karur Vysya Bank and CSB Bank have shown more growth in fixed deposits than in Current Account Savings Account (CASA) deposits. This movement reflects a preference for term deposits by customers, which affects the banks' cost of funds and net interest margins.
Key Highlights:
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Fixed Deposits Growth: Karur Vysya Bank registered a substantial growth in fixed deposits, exceeding CASA growth. CSB Bank also registered a 29.2% growth in term deposits, exceeding its CASA growth.
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CASA Deposits: Karur Vysya Bank's CASA deposits increased at a lower rate of 2.8% year-on-year to ₹27,832 crore. CSB Bank's CASA deposits rose by 10.9% to ₹8,918 crore.
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Total Deposits: Karur Vysya Bank's total deposits increased by 14.55% to ₹1.02 lakh crore, while CSB Bank's deposits increased by 10.3% to ₹36,861 crore.
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Advances Growth: Advances of Karur Vysya Bank increased by 13.5% to ₹84,486 crore, and CSB Bank's advances increased by 10.3% to ₹31,843 crore.
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Market Impact: This trend can result in increased cost for the banks, which can impact their net interest margins.
As banks ride out these changes, deposit growth needs to be balanced with lending strategies to ensure profitability.
Sources: Economic Times, CNBC-TV18, Angel One