Banks report healthy loan growth in Q3; Casa ratio continues to decline

The Trend and Progress report of the Reserve Bank of India, which was released last month, observed that with the increase in deposit rates catching up with that in lending rates

Indian banks continue to post healthy growth in loans in the October-December period with most lenders clocking double-digit growth. Deposit growth in most banks also picked up during the period. Non-banking financial companies also reported 

robust growth in their disbursement/asset under management. However, the share of low-cost deposits — current and savings account deposits —to total deposit continued its declining trend for most banks in the third quarter of the financial year, which could exert pressure on margins as loan re-pricing cycle is almost over.
 

The Reserve Bank of India’s Trend and Progress report released last month observed that with the increase in deposit rates catching up with that in lending rates, the profitability of banks may moderate going forward, though it may remain robust. .