Page 5 - Banking Finance June 2019

BANK UPDATE

BANKING

Banks witness flow as balance in Jan Dhan accounts
Kotak Mahindra reports
rises
14% profit rise
Banks have been experiencing a continuous flow in Current Account and Sav-
A 14 percent rise has been reported
ings Accounts (CASA) due to an increasing
by Kotak Mahindrra Bank in its con-
balance in Pradhan Mantri Jan Dhan Yojana
solidated net profit at Rs 2,038.27
(PMJDY) accounts. This is observed as one of
crore for March quarter, 2018-19.
the growth drivers of CASA.
The bank has achieved a profit of Rs
1,789.24 crore in the same quarter CASA deposits are beneficial to banks as they
of the previous financial year. can bring down the cost of funds in compari-
son with bulk deposits.
The total income of the bank in-
creased to Rs 13,823.33 crore dur- Banks have reported considerable growth in this segment in FY19. SBI has re-
ing the latest quarter, up from Rs ported an 8.42 per cent growth in CASA last fiscal with deposits reaching Rs
10,874.12 crore in the previous year, 12,87,285 crore.
the bank said in a regulatory filing. The growth of HDFC Bank and ICICI Bank respectively, stood at 14 per cent and

Consolidated net profit for 2018-19 13 per cent. Syndicate Bank in the similar manner had a 5 per cent increase
financial year increased to Rs 7,204 while Canara Bank revealed 4.65 per cent growth.
crore from Rs 6,201 crore in the pre-
As per the data from government, the total balance in these 'basic' bank ac-
vious year. Income during the year counts oresntly stands at Rs. 99,752 crore, with 35.5 crore beneficiaries.
rose to Rs 45,903.36 crore from Rs
As the average balance in most Jan Dhan accounts hovers at around Rs 2,000,
38,723.67 crore.
bankers see some advantage in them.
Gross non-performing assets (NPAs) or
A senior SBI official in this regard remarked that PMJDY "did make a positive
bad loans of the lender were 1.94
difference" to the bank, along total deposits of Rs 31,235 crore as on March
percent of the gross loans as at 31
31, 2019, against Rs 23,982 crore in March 2018. The monthly average bal-
March, 2019, slightly down from 1.95
ance now stands at Rs. 2,192.
percent at March-end 2018. Likewise,
"But the CASA growth is also driven by additional factors such as the introduc-
net NPAs were 0.70 percent, down
tion of digital accounts and some banks offering attractive interest rates on
from 0.86 percent a year ago.
savings accounts," he added.
During a meeting, the board of the
These have together made a contribution to a significant share of CASA in the
bank recommended a dividend of Rs
total deposits. As per the RBI data on deposits and the credit of scheduled com-
0.80 per equity share for 2018-19.
mercial banks, CASA now has a share of about 43 per cent.
BANKING FINANCE | JUNE | 2019 | 5