Canara Bank plans to open 250 branches to boost Casa deposits: MD & CEO

CEO says bank has cushion to manage RBI's tighter liquidity coverage norms

With competition for resource mobilisation turning intense, public sector lender Canara Bank is planning to open 250 branches to focus on mobilising low-cost money — Current Account and Savings Account (CASA) — during the current financial year.

K. Satyanarayana Raju, managing director (MD) and chief executive officer (CEO), told Business Standard that the Board has approved the plan to open 250 branches. The bank is using the latest technology — artificial intelligence — to analyse data.

“The bank’s weakness is CASA,” Raju said. Share of the low-cost deposits declined to 30.98 per cent at the end of June 2023 from 33 per cent a year ago.

Wherever there is potential, the bank will open branches with the target of mobilising CASA. Last year, the bank opened 200 branches, he said.

The Bengaluru-based lender’s total deposits increased 11.97 per cent year-on-year (Y-o-Y) to Rs 13.35 trillion at the end of June 2024.

After the amalgamation (merger of Syndicate Bank with Canara Bank), the bank closed down 1,300 branches to take benefit of synergy.

“This has given us a cushion to open new branches where the bank does not have a presence,” Raju said.

Referring to the Reserve Bank of India’s (RBI’s) proposal to tighten norms for liquidity coverage ratio (LCR), Raju said RBI’s move will not impact Canara Bank in a negative way.

Against the regulator's mandate of 100 per cent LCR, the bank's internal policy is to maintain a ratio of 110 per cent.  

At present, the bank's LCR is at 140 per cent.

The RBI’s proposed rule will have an impact of 10-11 percentage points. So, the LCR level may come down 129-130 per cent, Raju said.

“Banks, which are capable of raising deposits, will dominate the market. We will see a sea change in the days to come. We recognised this 15 months ago. Last year, the bank's deposits grew double digit,” he added.