High interest rate on small savings, shifting household preference for equity and mutual funds and corporate houses moving their cash balances from current accounts to liquid mutual funds with higher returns have weighed in on the CASA (current account-savings account) growth of Bandhan Bank during the third quarter of FY26.

The bank’s CASA deposits as of Q3FY26 stood at ₹38,660 crore, down 9.5 per cent from ₹42,710 crore in Q3FY25.

“Although the RBI has reduced the repo rates, the government of India has not reduced the small savings rate. So, post offices are in an advantageous position compared with the banks, and I am talking about all the banks here. Householders are also finding different avenues to invest. Earlier, it was bank fixed deposits or bank CASA. But now, most of them, to whatever extent liquidity is needed, keep it in the CASA. And the balance amount is invested into various other options available like mutual funds, stocks, etc,” said Partha Pratim Sengupta, MD & CEO, Bandhan Bank.

“Corporates also are not keeping idle cash in their current accounts. They are investing in the liquid mutual funds or other avenues,” he added.

Sengupta, however, said that the bank is working on a strategy to expand its earnings, including coming up with a 3-in-1 account combining savings with demat and trading, aimed at retail depositors. The bank is also looking to strengthen its fees and commissions earnings in areas like payments, bank guarantee and letter of credit that will strengthen its other income.

Bandhan Bank’s net profit during Q3FY26 was ₹205.59 crore, down 51.7 per cent from ₹426.49 crore in Q3FY25, largely on account of lower net interest income and one-off gains in Q3FY25.

Net interest income during Q3FY26 was ₹2,690 crore compared with ₹2,810 crore in Q3FY25, down 4.5 per cent.

Sengupta said that a combination of falling repo rates, coupled with the bank’s strategic move to expand the secured books have contributed to the decline in net interest income.