The decline was led by financial savings accounts the place the share dropped 210 bps to twenty-eight.9%, as depositors more and more shifted funds to higher-yielding options equivalent to equities, mutual funds and gold. The CASA share was additionally down from the year-ago degree of 38.3%. Falling CASA ratio displays the broader slowdown in deposit mobilisation.
Additionally Learn: Banks really feel the pinch as CASA pool shrinks
General financial institution deposits grew 10% year-on-year to ‘239.8 lakh crore on the finish of December, marginally slower than the 11% progress recorded within the year-ago quarter. Bankers count on the CASA ratio to enhance within the present monetary 12 months, as heightened geopolitical uncertainty and unstable fairness markets immediate savers to park extra funds in financial institution deposits.
Financial savings account balances rose 8% year-on-year to ‘69.4 lakh crore within the December 2025 quarter, rising from 5% progress a 12 months earlier.
Present account deposits grew 10% to ‘21.4 lakh crore in contrast with 9% progress within the December 2024 quarter. The sustained erosion in CASA is unfavorable for banks, because it pushes up their general price of funds. With the share of low-cost funds declining, lenders are more and more compelled to lift cash via higher-cost time period deposits, short-term devices equivalent to certificates of deposit (CDs), and bulk borrowings to assist credit score progress. CD issuances by banks reached a document excessive of ‘15.5 lakh crore in FY26, up 17% YoY as lenders turned to market borrowings to fund credit score progress.
CASA deposits are typically extra steady and fewer rate-sensitive than bulk liabilities, offering banks with better flexibility during times of credit score enlargement or liquidity stress. Greater funding prices even have direct implications for banks’ profitability because it compresses their web curiosity margins (NIMs).Additionally Learn: Replace from 5 south-based banks: All report greater credit score progress than deposit progress
With deposit progress lagging credit score enlargement, banks’ credit-deposit (CD) ratio has inched up. The ratio rose to an all-time excessive of 83.0%, from 82.4% within the earlier fortnight, pushed by seasonal tax-related deposit outflows whilst credit score progress remained modest.
Whole financial institution credit score reached ‘207.7 lakh crore as of 15 March 2026, registering 13.5% YoY progress, greater than 11.1% within the corresponding interval final 12 months. Compared, mixture financial institution deposits reached ‘250.1 lakh crore, rising 10.8%, up from 10.2% progress a 12 months earlier.
