Central Bank of India reported a 29.83% jump in global advances to ₹3,81,035 crore for Q2 FY27. However, deposit growth lagged at 14.43%, causing the CASA ratio to slip to 44.70%. Investors are monitoring this imbalance as it may increase the bank's funding costs and pressure profit margins.
Central Bank of India released its provisional business updates for the second quarter ending September 30, 2026, showing a sharp rise in credit deployment. The bank reported global advances of ₹3,81,035 crore, a 29.83% increase compared to the same period last year. This aggressive growth indicates strong demand for credit, but it has highlighted a growing challenge in the bank's balance sheet regarding how it funds these loans.
While the bank successfully expanded its loan book, total deposit growth trailed significantly, coming in at 14.43% year-on-year to reach ₹5,08,586 crore. When a bank lends money faster than it gathers deposits, it faces a liquidity challenge. To bridge this gap and continue funding its loan growth, the bank may have to rely more on bulk term deposits, which are generally more expensive than the money sitting in regular savings and current accounts.
This trend is reflected in the bank's declining Current Account and Savings Account (CASA) ratio, which dropped to 44.70% from 46.83% in the year-ago quarter. The CASA ratio is a crucial metric for investors because it represents the proportion of low-cost money the bank holds. A lower CASA ratio means the bank's cost of funds is likely rising. If the bank cannot pass these higher costs on to its borrowers, it may face pressure on its Net Interest Margin, which is essentially the profit a bank makes from the difference between the interest it earns on loans and the interest it pays on deposits.
This situation is not unique to the bank but reflects a broader trend across the Indian banking sector, where competition for household savings has intensified. With the industry facing a stiff fight for deposits, banks are often forced to offer higher interest rates, which can eat into profitability. For investors, the bank's ability to balance rapid credit growth with cost-effective deposit mobilization is a key factor to watch.
The next major update to track will be the full financial results for the quarter. Investors will likely look for management commentary on loan book quality, the specific strategy to improve the CASA ratio, and whether the bank expects its interest margins to stabilize in the coming quarters. Any details on the composition of the loan book—such as the balance between retail, corporate, and MSME segments—will also be important to understand the overall health and risk profile of the growing advances portfolio.