Bandhan Bank's loan book grew 13.1% to ₹1,58,335 crore in the September quarter, but investors are watching the shifting deposit mix. The CASA ratio, representing low-cost funds, fell to 26.71%, forcing the bank to rely more on higher-cost term deposits.
Bandhan Bank released its business update for the second quarter ended September 30, 2026, showing steady growth in lending but rising challenges in how it funds its business. The bank's loan book expanded by 13.1% compared to the previous year, reaching ₹1,58,335 crore. Total deposits also saw an increase, growing 9.2% to reach ₹1,72,689 crore.
While the expansion in loans suggests healthy demand, the composition of the bank's deposits has become a key point of interest for investors. The Current and Savings Account (CASA) ratio, which reflects the money held in low-cost checking and savings accounts, fell to 26.71%. This is a notable decline from the 29.40% reported in the previous quarter (June 2026).
When a bank’s CASA ratio drops, it means a larger portion of its funding is coming from retail term deposits and other higher-cost instruments. This shift can be challenging because banks pay more interest on term deposits than on standard savings or current accounts. As the cost of gathering these funds increases, it can place pressure on the bank's net interest margins—the gap between what the bank earns on loans and what it pays on deposits. To offset this, the bank saw a 16.8% year-on-year increase in retail term deposits, which rose to ₹79,340 crore as it actively sought to secure funding.
On the positive side, the bank’s asset quality metrics remain stable. The pan-bank collection efficiency, which tracks how well the bank recovers its loans, held steady at 98.9%. This suggests that despite the shift in funding sources, the core business of lending and recovery is operating consistently. The bank also reported a strong liquidity coverage ratio of 137.88%, indicating it maintains a sufficient buffer to meet short-term obligations.
The stock closed at ₹176.00 on October 1, 2026. Looking ahead, investors will be closely watching the bank's upcoming quarterly financial results for clarity on how this change in deposit mix impacts overall profitability. Additionally, the bank recently appointed Vinay Jain as interim CFO on September 26, 2026, and the market may look for any guidance or strategic adjustments from the management regarding the funding cost outlook in the coming months.