Kotak Bank Says Low-Cost Casa Deposit Base 'Stable' In December Quarter

After a few months of decline, the proportion of current and saving account deposits has been "stable" for Kotak Mahindra Bank in the December quarter, a senior executive said on Thursday.

On deposit rates and what the account holders should expect, the lender's head of distribution and retail liabilities, Puneet Kapoor, said, "we are in a higher interest rate regime and just a few days ago, went for a 0.05% increase."

"I'd assume that at the current level it (Casa share) will kind of stabilise," he told reporters on the sidelines of a bank event here.

To a specific question on what has been the bank's experience in the ongoing December quarter, Kapoor said the Casa base has been "stable".

The bank's share of Casa deposits declined to 48.3% in the September quarter, as against 56.2% in the year-ago period.

He said over the past few months, the share of low-cost Casa deposits has been going down for the entire industry as people discover newer avenues like term deposits for getting higher yields on their funds.

"Across all walks of life, people have discovered higher interest giving products. They are consciously therefore channelising their money to these higher interest giving products," he said.

The lender joined hands with Getsetup -- a peer-to-peer platform focused on senior citizens -- that will offer its services to account holders under Kotak's 'Grand' programme free of cost.

Kapoor said at present the bank has about 10 lakh account holders under the Grand programme, and added that the deposits by these customers are over 5x of other segments because of the higher proclivity to save.

He said a large part of these accounts are in fixed deposits, and through the programme, the bank will focus to get more number of its eligible existing customers into the Grand programme, and also look for other senior citizens outside.

Senior citizens offer a lucrative opportunity for banks because of the less volatility in the deposits and they also do not explicitly chase higher yields, he said.

Getsetup's Managing Director Ashwini Kapila said the platform already serves 20 lakh subscribers with access to classes, events and experiences in health, nutrition and wellness, and the tie-up will help it grow further.