Dots-to-Join – 27 th February 2024

CASA Decline: Banks’ Battle for Balance

Shrinking CASA Ratio of Indian Banking System Latest CASA Ratio for Major Banks

42.9 Bank Latest CASA Ratio (%)

HDFC 38.0

ICICI 39.6

Axis 42.1

Kotak 47.7

SBI 41.2

Source: Mint, ICRA Limited Source: Banks’ Investor Presentation

Note: Data is as of 31st Dec each year Note: Data as of Dec 2023

• CASA ratio is current and savings account deposits as a % of total deposits

• Total Deposits = Current Account + Savings Account + Term (Fixed) Deposits
• Post demonetization, CASA ratio had jumped to 37.8% in 2016 from 31.6% in 2014
• CASA ratio peaked at 42.9% in Dec 2021 and gradually fell to 39.3% in Dec 2023
• As per ICRA, CASA levels are likely to remain comfortable above mid-thirties
• Reducing cash requirement with increasing digital payments could support CASA levels
• As per RBI data of five major banks in FY24 (up to 1st Sep)
• Savings deposits earned 2.7-3% p.a.
• Term deposits of 1-3 years earned 6-7.1% p.a.

Investment in securities market are subject to market risks, read all the related documents carefully before investing. Disclaimer: https://www.hdfcsec.com/article/dislaimer-1795
Double Triumph: ETF Turnover Hits Rs. 1 Trillion Again

ETF Traded Value (Rs. lakh cr) ETF AUM (Rs. lakh cr)

Source: Business Standard, NSE Source: Business Standard, NSE

* Data until Dec 2023

• Total AUM of ETFs stood at Rs. 6.5 lakh cr as of Dec 2023, more than 4x of pre-pandemic level of FY20
• Value of ETF traded on NSE surpassed Rs. 1 lakh cr during Apr-Dec 2023, 2nd year in a row
• ETF traded value in FY24 (till Dec 2023) stood at Rs. 1.2 lakh cr, more than 2x of pre-pandemic level of
FY20
• As per Capitaline, ETF traded value is around Rs. 37,000 cr since Dec 2023. This would take total for
FY24 so far to ~Rs. 1.6 lakh cr
• Number of ETFs have doubled from 87 in FY20 to 180 in FY24 (till Dec 2023)

No. of ETFs FY20 FY24 (till Dec 2023)

Equity 68 141
Debt 8 24
Gold 11 15
Total 87 180

Source:
https://www.livemint.com/industry/banking/banks-learn-that-paying-little-in-savings-interest-comes-with-a-cost-11708276044477.html
https://www.business-standard.com/markets/news/etf-trading-turnover-tops-rs-1-trillion-for-second-year-in-a-row-124022000866_1.html

Investment in securities market are subject to market risks, read all the related documents carefully before investing. Disclaimer: https://www.hdfcsec.com/article/dislaimer-1795