Deposit rates may rise 105 bps due to 190 bps repo rate hike: SBI report

CASA occupies a 45% share in overall bank deposits; it is FDs, which make the remaining 55%, which will need the rate adjustment

With the share of current and savings account (CASA) deposits at 45 per cent in the banking system, a 190 basis points (bps) increase in repo rate could at best translate into a 105-bps increase in deposit rates. This is because it is only the 55 per cent of the term deposits that would need rate adjustments, resulting in a less than full adjustment of deposit rates to repo rate, a report by State Bank of India’s (SBI) economic research department said on Monday.

“Any deposit rate increase beyond that will be an additional one,” the report said.

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