Money & Banking

Bandhan Bank not to revise savings deposit rates in the near term: MD

Shobha Roy Kolkata | Updated on January 08, 2018

Chandra Shekhar Ghosh, MD and CEO, Bandhan Bank - Photo: DEBASISH BHADURI

Looking to shore up share of CASA to 30% of total deposits this fiscal

At a time when banks have been slashing savings bank deposit rates, Kolkata-based Bandhan Bank expects to keep the rates unchanged in a bid to shore up its CASA (current account and savings bank account) ratio.

According to Chandra Shekhar Ghosh, MD and CEO, Bandhan Bank, there will be no ‘immediate revision’ in its interest rate on savings bank deposit, which currently stands at four per cent for deposits up to ₹1 lakh; and six per cent for those above ₹1 lakh.

The bank aims to shore up its CASA ratio to 30 per cent by the end of this fiscal from the present 28.8 per cent.

“We have not revised our interest rates, and we do not intend to do so in the near future as well. We want to increase the share of CASA to our total deposits,” Ghosh told BusinessLine.

The country’s largest lender State Bank of India was among the first to slash interest rates to 3.50 per cent on deposits up to ₹1 crore, in July this year. A host of other banks, including HDFC Bank, Axis Bank, Bank of Baroda, Indian Bank and Karnataka Bank, followed suit.

The move (to cut deposit rates) was prompted by a decline in inflation rate, surplus liquidity and muted credit growth.

Business growth

Bandhan Bank’s total deposits currently stand at ₹25,200 crore, and advances, at ₹22,250 crore. The bank is aiming at 35-40 per cent growth in the current financial year.

Nearly 90 per cent of its business comes from lending to the microfinance sector, while the remaining 10 per cent comes from retail. Of this (retail business), close to 40 per cent comes from Bengal.

“We have a good presence in the eastern States of Bihar, Assam and Odisha. We expect to shore up the retail business in these States,” he said.

The bank will focus on the affordable housing segment (loans below ₹15 lakh), car loans, loans against property and gold loans.

Bandhan Bank’s housing loan book currently stands at ₹100 crore. “It is a small business at present but we expect to scale up loans to the affordable housing segment in a big way,” he said.

The retail segment, he said, would grow at a higher rate (on a smaller base). “Share of retail could increase to 12 per cent of total business and we are comfortable that way.”


The bank recently appointed Goldman Sachs, JPMorgan Chase, Axis Bank, JM Financial and Kotak Mahindra Bank as lead managers of its proposed initial public offering which is likely to hit the capital market sometime next fiscal.

The size of the issue, its timing and other related aspects will be finalised in the due course, he said.

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Published on October 05, 2017
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