Banks' CASA Records Continuous Pressure In Q3 FY24

Throughout the third quarter of December 2023, banks faced a continual decline in their current account savings account (CASA) ratios. South Indian Bank observed a drop to 31.79 per cent from 33.83 per cent in the same quarter of the previous fiscal year, while Federal Bank also saw a decline to 30.63 per cent from 34.24 per cent. Bank of Maharashtra similarly experienced a decrease from 52.50 per cent to 50.19 per cent.

Comparatively, in the previous quarter ending 30 September 2023, South Indian Bank had a CASA ratio of 32.03 per cent, Federal Bank stood at 31.17 per cent and Bank of Maharashtra at 50.71 per cent.

Yet, amidst this decline, these banks recorded double-digit growth in their credit books by the end of 31 December 2023. Karur Vysya Bank reported a 17.09 per cent year-on-year growth in advances, reaching Rs 64,168 crore. Other banks like Dhanlaxmi Bank, South Indian Bank, Federal Bank, Bank of Maharashtra and CSB Bank also witnessed notable growth in their advances ranging from 10.83 per cent to 22.59 per cent.

Similarly, their deposits showed a double-digit surge compared to the previous year. With growth rates ranging from 9.37 per cent to 20.65 per cent, these banks, including Karur Vysya Bank, Dhanlaxmi Bank, South Indian Bank, Federal Bank, Bank of Maharashtra and CSB Bank, saw significant growth in their deposits from the year-ago period.

Separately, Mahindra & Mahindra Financial Services, a non-banking finance company (NBFC), marked a 7 per cent improvement in disbursements in the third quarter of FY24, amounting to nearly Rs 15,500 crore. The company's business assets also saw significant growth, reaching around Rs 96,850 crore by the end of the quarter, marking a 25 per cent increase over December 2022 and approximately 17 per cent over March 2023.

The company's collection efficiency witnessed an upturn, standing at 98 per cent for December 2023, an improvement from the 94 per cent achieved in November 2023 and consistent with the 98 per cent recorded in December 2022.