Liquidity tightness impacting deposit growth and NIM
Market liquidity constraints have made deposit mobilization costly, pressuring NIM. Management acknowledged the challenge and is using excess SLR and higher-rate deposits to manage.
CANBK / Q3-FY25 / risks
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Canara Bank · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
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LCR guideline impact could compress margins further
Proposed RBI LCR guidelines effective April 2025 could reduce LCR by 11-12 bps, requiring costly longer-tenure deposits that may further compress NIM.
CASA ratio decline and competitive pressure
CASA ratio has fallen to 30% due to customers shifting surplus to term deposits or mutual funds. Management's initiatives may take time to reverse the trend.
Gold loan regulatory changes could impact growth
RBI's potential changes to gold loan norms (collateral-free for PSL) may affect the bank's large gold loan portfolio, though management sees no immediate issue.