The Hindu Business Line : BoB plans to grow CASA deposits

Mumbai, Sept. 9 As interest margins are likely to be under pressure this fiscal due to rising interest rates, Bank of Baroda is taking steps to increase its share of low cost deposits, improve its return on advances, and reduce delinquencies.

The bank is looking to increase its share of current account savings account deposits (CASA) and re-price loans, both at the time of rollover or while issuing fresh loans, said Mr M.D. Mallya, Chairman and Managing Director, Bank of Baroda.

“One way to overcoming the pressure on Net Interest Margins is to try to moderate the cost of deposits by focusing on CASA and retail term deposits. We are also looking at diversifying our advances portfolio and not merely focusing on bulk advances,” he said.

The traditional dependence of banks on treasury income has given rise to a misplaced complacence, he remarked.

CASA target

This year, Bank of Baroda is looking to increase its CASA share to 38 per cent of total deposits, from 36 per cent last year. “We are looking at real growth in CASA. This can happen only if we increase the retail customer base and see how much incremental business we can get from existing clients,” Mr Mallya said.

In the current fiscal, the bank plans to add 30 lakh customers to its existing base of three crore. The bank’s strong presence in Tier II and Tier III cities will help it to achieve this goal, Mr Mallya said. In order to augment its customer base, the bank will also expand its network. Crucial to this expansion will be the re-orienting of the bank’s staff. The bank has tied up with third party human resource trainers at the branch level to train the staff on marketing, cross-selling of products and customer services.