Analysis of CASA Ratio of IDBI Bank in Sitabuldi, Nagpur Branch & Solutions for Increasing CASA

Ratio of Bank

Guided by:- Prof. Dilip Vahoniya Presented By:- Kirit.V.Kene

Assistant Professor

IABMI, Anand

Company Guide:- Anupam Dhurve

Assistant Manager

Flow of Presentation

• Introduction of bank and Company

• Network of IDBI Bank

• Objectives of Project

• Meaning of CASA

• Solutions for Increasing CASA Ratio

• Scope and Limitation of Study

• Research Methodology

• Suggestion and Conclusion

• References

Introduction of Bank

• Bank is a financial institution which receives deposits from the public and lends them for investment purpose .

• Banking is a service industry .

• Banks provide financial services to the people , business and industries.

Introduction of Company• The Industrial Development Bank of India Limited commonly known by its

acronym IDBI.

• It is one of India's leading public sector banks and 4th largest Bank in overall ratings.

• RBI categorized IDBI as an "other public sector bank". It was established on July 1, 1964 by an Act of Parliament .

• The main aim behind setting up of IDBI was to provide credit and other facilities for the Indian industry, which was still in the initial stages of growth and development.

• The Industrial Development Bank of India (IDBI) was established under an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India. IDBI Bank Ltd. is a Universal Bank with its operations driven by a cutting edge core Banking IT platform. IDBI Bank logo indicates the Human Development.

Introduction of Company• The Bank gives Sunday Banking for customer satisfaction and for their

convenience.

• The Bank has also set up an overseas branch at Dubai and have plans to open representative offices in various other parts of the Globe, for encashing emerging global opportunities.

• The Bank’s experience of financial markets will help them to effectively cope with challenges and capitalize on the emerging opportunities by participating effectively in the country’s growth process.

• The Bank's total business, during FY 2013-14, reached Rs. 4,33,460 Crore, Bank earned a net profit of Rs. 1121 Crore, Bank having deposits 2,35,774 crore, Bank having a Gross Income Rs.29,576.

Network & delivery channels(Current Scenario)

 ATMs Centers Sole Center Rural

2569105299853

Source:www.idbi.com

No. of Branches 1483

 Metro Urban  Semi Urban Rural International

3524324222761

Objective of the Project

• To Analyze the CASA Ratio of IDBI Bank Limited Branch Sitabuldi Nagpur.

• To find out how to increase the CASA Ratio of IDBI Bank Limited Branch Sitabuldi Nagpur.

Meaning of CASA• Current Account

• Current accounts are specially for customers those who have to carry out business and large number of transactions in the account every day. There are no restrictions on the number of transactions in current accounts.

• No interest is paid on the balances in current accounts.

• Savings Account:-

• Savings Bank accounts are specially for individual persons or jointly individual (Joint Account), in which having a transaction limit at every day. i.e. Cash withdrawn once at a day and 100 times deposition at every year.

• Bank Pay interest on this account. i.e. Currently 4% Interest rate on saving account

Analysis of CASA Ratio Deposits in Current & Savings Account

CASA Ratio =

Total Deposits

Particulars

March 2013 FY’14 - 15

Budget Actual Difference

March 2014June 14Actual

June 14 Budget

Mar 15 BudgetBudget Actual Difference

CASA 101.28 100.48 -2.76 84.18 133.49 49.31 101.14 81.08 135.75

CA 29.05 46.86 17.81 26.71 41.96 15.25 34.78 25.50 44.22

SA 72.23 53.62 -18.62 57.47 91.53 34.06 66.36 52.58 91.53

In Crore

Source: Nagpur, Branch

Marketing StrategyThe bank has two ways of marketing namely:-

1. Through Branch

2. Through Sales Department

1. Through Branch:-

• In this method they talk directly to the existing customers about the various new schemes and other important information.

• According to the bank people this method is effective but the information does not go to large number of people.

• Because of this method the people are not aware of various schemes and important announcements about bank so they cannot open account with us.

Marketing Strategy 2. Through Sales Department

• In this method the sales department employees take the whole responsibility of giving the information to common people about the new schemes and facilities.

• The employees take the help of pamphlets, advertisement in television, etc., go door-to-door for distributing pamphlets, give advertisements on internet on various websites most visited by people, etc.

• This method has positive impact that the people come to know about the various new schemes and facilities.

• This method is approved by the employees.

• Video

Scope of Project• CASA stands for current and savings account. Different kinds of deposits —

current account, savings account.

• A high CASA ratio indicates that a higher portion of the bank’s deposits come from current and savings accounts.

• This means that the bank is getting money at low cost, since no interest is paid on the current accounts and the interest paid on savings account is usually low.

• Current and Saving Accounts are demand deposits and therefore pay lower interest rates compared to term deposits where the rates are higher.

• Thus higher CASA ratio means that more of the money deposited in the bank is in the demand deposits i.e. the CASA, thus bank is getting the money at lower cost.

Scope of Project The CASA ratio shows how much deposit a bank has in the form of current and saving account deposits in the total deposit.

• Net interest margin is difference between total interest income and expenditure and is shown as a percentage of average earning assets.

• Higher income from CASA will improve the net interest margin as the cost of this fund is relatively lower.

• For instance, most banks lend at over 10%, whereas, the rate of interest that they pay on saving deposit is just 3.5%.

• However, actual realization depends on other expenditure, too.

Limitation of the study• Analysis was purely based on the responses of respondents.

• There was limited time for the collection of data for study.

• Selected sample due to its size may not represent actual population.

• Respondent has given answer the question based on their perception and experience which can’t be generalized.

• The Study is confined to Branch only not to all over the whole Bank.

How is CASA different from term and demand deposits?

• Current and saving accounts remain operational.

• Depositors don't need to give prior notice to withdraw money, however, in case of term deposits, the money is locked in for a specific period.

• If a depositor wishes to withdraw the money before maturity, he may have to pay a fine.

• Usually, an overdraft facility is available with the current account deposit. Demand deposit gives you the facility to withdraw your money anytime.

Types of Saving Account in IDBI Bank• Saving accounts

• Royale & Royale plus Account.

• Preferred Account.

• Power plus Account.

• Super Savings Account.

• Powerkidz Savings Account.

• Super Shakti Savings Account / Women’s Account.

• Jubilee plus Savings Account.

• Being Me Account.

• Sabka Savings Account-Relaxed KYC.

• Sabka Basic Savings-Complete KYC.

• Family Account (For Indian Army).

Types Of Current Account in IDBI Bank

• Flexi Current Account (Retail).

• Flexi Current (Co-op and other Banks).

• Flexi Accounts for BULK (TASC, Educational Institutes, Government Accounts).

Solutions for Increasing CASA Ratio of IDBI Bank

CASA plays important role in Bank Cash liquidity. A high CASA ratio indicates that a

higher portion of the bank’s deposits come from current and savings accounts.

• Bank should concentrate on Opening more Saving Accounts as well as Current Account.

• Bank should Increase their Branches and ATM’s in suitable area so that customer

preference gives towards our Bank.

• Install Cash Deposit Machine in Market Area, Urban Area, Rural and semi-rural area so

that customer attracts and deposit conveniently their cash. It is more suitable for the

retailers, businessmen, senior citizens and other customers also.

• Bank Focus on Green channel counter so that customer give more preference to them.

• Give loyality gifts to the creamy customers.

• Find out the good customers and open their account in our Branch.

Research MethodologyData Collection

1) Primary Data Collection:-

Primary survey will be conduct with the help of Structured Questionnaire.

2) Secondary Data Collection:-

Secondary Data will be collected from as per IDBI Bank,Sitabuldi, Nagpur Branch, Journal, Website, Magazines.

1. Research Design Descriptive Research

2. Sample Unit Bank Customers

3. Sample Size 100

4. Sampling Method Non probability sampling

5. Sampling Technique Convenient Sampling

6. Sampling Area IDBI Bank Ltd. Sitabuldi Nagpur Branch

Basic Information of Customers

Age of Consumers

Education of Customers

Occupation of Respondents

Marital Status of Customers

Banking Details

Years wise Segmentation

Bank Service used by Respondents

Bank Service used by Respondents conti…..

Account Currently used by Customers

Savings Account

Account Currently used by Customers conti…..

Account Currently used by Customers conti…..Current Account

Preference of Transaction by Respondents

Problem Facing by Non-Home Branch Respondents

Types of problem facing in Non-Home Branch

Satisfied Customers in IDBI Bank on Account Services

87%

13%

Satisfied Customers in IDBI Bank on Account Services

yesno

Problems facing by customers

Continuation of Account Services in IDBI Bank

96%

4%

Continuation of Account Service in IDBI Bank

yesno

Suggest to anybody for using IDBI Bank Services

Conclusion• From the analysis part it can be conclude that customers have a good respond

towards IDBI Bank products in Nagpur.

• IDBI Bank is in good position compares to other public sector bank, having large number of customers & providing good services to them.

• The bank has a wide customer base, so the bank should concentrate on this to retain these customers and also concentrate to increase the more customers.

• Launch Innovative product

• Better customer services

• Fastest customers problem solving techniques

• Customer retention

• Apart from all the above, IDBI Bank believe in providing good customer services to their customers which is a key factor for success in future.

Suggestions for CASA Ratio of IDBI Bank

• Increase Facility in ATM centre i.e. Mobile Top up & Recharge, Railway tickets Booking,

Income Tax payment Counter and other services so that more customers attracts.

• Increase more products in the current account so that more retailers and business man

attracts.

• Increase cash Deposit and Cash Withdrawal facility from Non-Home Branches.

• Provides Good and rapid service to the Non-Branch Customers also.

• Secure Mobile Banking Facility so that more customer use it.

• Increase facility on the Internet Banking Facility, so that more customers conveniently

banking from Internet also.

• Open the BULK current Account in Bank.

• Target on Creamy Customer of Market.

References1) Books and Journals

• Annual Report of IDDI Bank (2013), p. 35-37

• Chandel K.S. (2009): "Ethics in Commerce Education." Paper presented at the Annual International Conference for the All India Management Association, New Delhi, India, p. 19–22 June.

• Crowther & Nicholas Capaldi, Ashgate Research Companion to Corporate Social Responsibility, Chapter 15, p 287-303.

• “ Chdrashekhar Verma”, “Corporate Banking and Retail Banking in India”, p.84-94

• Dr. A. Rama Chandran And R. Amuthan, “Impact Of Casa Deposit Growth On The Profitability Of Nse Listed Nationalized Banks And New Generation Banks In India - A Comparative Study” International Journal Of Research In Computer Application & Management. p.33-37

• “ J. Sethraman” “Retail Banking models and Strategies at the Indian Scenario” p.45-49.

• “Mukesh Kumar Verma” “International Journal Of Research In Computer Application & Management” P 15-17

References• Nair, Tara S. (1999), “Banking Concerns”, Commentary on Economic and Political,

Vol.XXXIV, No.28, p.1871.

• Ramappa, P and sivasankaraiah, M.,2007, Perforamance of Bank: A astudy. Southern Economist, 46(1): p.25-28.

• Sharma T., Kwatra, G. (2008) Effectiveness of Social Advertising: A Study of Selected Campaigns, Corporate Social Responsibility, Edited by David.p.101-107

• Vikas prabha, “IDBI Bank Mumbai Head Quarter” January-March-2014 “p.4-11”

• Websites:-

• http://www.idbi.com/flexi-current-account.asp accessed on12/07/2014

• http://www.idbi.com/flexi-current-accountbulk&tasc.asp accessed on 29/06/2014

• http://www.idbi.com/idbi-bank-about-us.asp accessed on 31/06/2014

• http://www.idbi.com/super-saving-account.asp accessed on 07/07/2014

• http://www.idbi.com/super-shakti-women-savings-account.asp accessed on 20/06/2014.

• http://en.wikipedia.org/wiki/CASA_ratio accessed on 02/07/2014

• http://www.nayamvala.com/casa accessed on 04/07/2014

Thank You