Banks are stepping up efforts to grow current account and savings account (CASA) deposits, in a bid to protect margins amid a competitive deposit environment. Data collated from Capitaline show that the average CASA ratio of 28 banks rose marginally to 36.27% in the July–September quarter, from 36.04% in the previous quarter. In the year-ago period, the ratio stood at 37.45%.

In post-earnings calls, most bankers indicated that margins might have largely bottomed out. They said margins are likely to improve in the coming quarters as deposit costs begin to stabilise and get repriced. CASA deposits — being low-cost in nature — help reduce the overall cost of funds and support better net interest margins (NIMs).

Federal Bank , for instance, consciously rationalised its wholesale and financi

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