For public sector banks, the Pradhan Mantri Jan Dhan Yojana (PMJDY) could bring a booty of over Rs 15,000 crore of low-cost deposits through CASA (current and savings account) within a year, a senior finance ministry official said. Banks have already garnered over Rs 1,000 crore from 22.4 million accounts that have been opened so far since August 28 when the scheme was launched.
Banks pay very low interest on savings account and deposits under CASA form a major source of funds. Therefore, banks with higher CASA ratio typically have better net interest margins, which means better operating efficiency. So, at a time when the going is getting tougher for state-owned banks, these deposits could help in improving their balance sheets.
"While these are zero balance accounts, they are aimed at those who are not under the banking net and they, too, need to save their earnings. So while there is no requirement to mandatorily maintain any minimum balance, but most account holders have parked their money in these," GS Sandhu, secretary, financial services told HT.
"The scheme is a big plus for banks as there will be a surge in CASA deposits and therefore there is no cause for worry for banks even as they would be providing Rs 5,000 overdraft facility to account holders with satisfactory repayment track," said RK Dubey, chairman and MD, Canara Bank.