Indian Banks Face CASA Deposit Decline, Plan Increased Corporate Bond Issuance

Indian banks are facing a decline in low-cost CASA deposits as savers shift towards higher-yielding market-linked investments, leading lenders to rely more on costlier short-term borrowings like Certificates of Deposit. Concurrently, banks plan to increase corporate bond issuances in the fourth quarter to bridge the gap between slower deposit growth and rising loan demand. Despite recent rate cuts, bond yields remain elevated, reflecting limited transmission of monetary easing and tight systemic liquidity, prompting banks to seek long-term funding through bonds.