Canara Bank aims at 28% growth in CASA

Bangalore-based public sector lender Canara Bank is aiming at a growth of 28 per cent in its CASA (current account and savings account) deposits at Rs 1 lakh crore during the current financial year. At the end of June quarter, the bank’s CASA deposits to domestic deposits constituted 24.07 per cent at Rs 77,902, a top official of the bank said.

“We are making all efforts to increase our CASA percentage to the total deposits. We have launched a three-month campaign – CASA Olympics -- from July 9 -- to increase savings and current accounts. We are targeting at least 3 million new accounts during the campaign period ending September 30,” Ashok Kumar Gupta, executive director of Canara Bank, said.

He said the target was to achieve 28 per cent of the deposits under CASA business during the current year and reach a level of Rs 1 lakh crore by March 2013. “We are aggressively working on this campaign. There is good competition among our 34 circles within the bank. We have opened around 500,000 accounts so far and the fresh accretions in the new accounts amounted to Rs 600 crore has been mobilised,” Gupta told Business Standard.

Canara Bank’s total deposits stood at Rs 3,34,619 crore at first quarter ended June 30, 2012.

During the earlier campaign titled ‘Conquer June 2012’ that ran between June 9 and June 30, the bank mobilised Rs 2,958 crore under the savings bank accounts. “By way of these two special campaigns, the bank would add another Rs 22,000 crore under the CASA business. The higher CASA will help us avoid slippage of accounts to NPAs, improve our net interest margins (NIM) and reduce gross non-performing assets. The bank would achieve 2.6 per cent net interest margin by the end of the year from the present 2.4 per cent,” Gupta said.

Currently, the bank has 45 million clients and 3,606 branches. It aims to increase the clientele by another 3 million during the special campaign. It is also planning to open 325 new branches during the current fiscal.

To secure additional accounts, the bank is also launching a new life insurance linked savings bank product in association with its joint venture company, Canara HSBC Oriental Bank of Commerce Life Insurance Company (CHOICE).

The product, Canara Freedom Suraksha, will be launched on August 21. Under this account, the bank would provide a term insurance cover of Rs 1 lakh for all savings bank customers. The existing savings bank customers also can avail of the benefit within the first two months from the date of launch, Gupta said.

He said the bank was looking at mobilising at least one million new accounts in the first two months of the launch.

“We are introducing this product as a value-added service to the customers of the bank at a nominal premium of Rs 177 to Rs 988 depending on the age of the customer. We are extending the cover without any medical test but merely on a declaration of good health by the customers. It covers both natural and accidental death,” he said.

The nominees of the account holders would get Rs 1 lakh in the event of death of the account holder until the age of 59 years.