Bank of India to engage advisor for crafting deposit growth plans

With competition for raising liabilities, especially low-cost deposits turning intense, public sector lender Bank of India (BoI) plans to rope in an advisor to work out a transformation & strategic business plan for current and savings account (Casa) deposit mobilisation, product development and growth. 

 

The share of the bank’s Casa has declined to 41.05 per cent in December 2024 from a peak of 45 per cent in March 2022.

It was 43.21 per cent in March 2024. The Mumbai-based lender has floated a request for proposal (RFP) to engage consultants for assignment.

 

Senior BoI executives told Business Standard that many challenges to mobilise Casa deposits — like shifting preferences of customers, especially retail, technology and intense competition, need detailed assessments. As a result, the bank is looking for expertise beyond organisation.

 

The competition for deposits is expected to remain intense as banks focus on increasing deposit growth and prevent it from constraining credit off-take.

 

The share of Casa ratio of scheduled commercial banks in India declined by 174 basis points (bps) year-on-year ((Y-o-Y), reaching 38.3 per cent at the end of December 2024, compared to 40.1 per cent over a year ago. Casa ratio was 42.8 per cent in December 2022.

 

This decline was driven by rising term deposit rates, which spurred stronger growth in the term-deposit segment and the presence of attractive alternative investment options, according to CARE Ratings analysis.

 

The share of Casa for public sector banks has seen a decline to 38.6 per cent in December 2024 from 40.3 per cent in December 2023 and 42 per cent in December 2022.

 

Private banks also saw a drop in share with Casa at 37.8 per cent in December 2024 from 39.9 per cent in December 2023. It was 44.5 per cent in December 2022, the rating agency added.