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Dabba Savings Account attracts CASA customers

How does ESAF Bank boost CASA performance? K. Paul Thomas, MD & CEO of the bank, reveals the initiatives:

Small Finance Banks (SFBs) face significant challenges in growing CASA deposits. Customer acquisition presents another formidable challenge, especially in regions with low banking penetration. Further, there is stiff competition from the bigger public and private sector banks that provide a broad range of banking products.


While large banks may not encounter any significant difficulties in collecting current and savings account deposits, small-sized banks face challenges in this area. In today’s market, large corporates prefer to use the ‘sweep-in’ and ‘sweep-out’ facility, which falls under the short-term FD category, rather than keeping funds in current accounts.

To overcome these challenges, the solution that Thomas relies on strategic planning, innovative solutions and effective execution. He believes these are necessary to foster CASA growth for SFBs and ensure sustainable banking operations in a competitive landscape. Acquiring new customers requires a significant investment in marketing and outreach activities. When transitioning from NBFCs, there are unique obstacles in sourcing CASA, as it requires reshaping customer perceptions and expectations.

Segments & Geographies

ESAF SFB successfully raised Rs 4.63 billion through an initial public offering in November 2023. However, the bank had to reduce the issue size by 20% due to the market’s volatile conditions. As of Q3FY24, the bank’s capital adequacy ratio was at 21%, with tier 2 capital accounting for 2% of the overall capital base. The bank has about Rs 1.35 billion worth of tier 2 bonds that will mature in the next 18 months. Recently, the bank raised Rs 1.45 billion through tier 2 bonds. It is currently in the process of raising another Rs 1.45 billion via the same route in the current quarter.

Thomas shares more details: “Our CASA ratio has touched 22.67 %. Our savings domestic book has grown by 55% & NR by 40%. Over the past fiscal year, our bank expanded its footprint with the opening of 53 new branches nationwide.”

The bank has observed robust growth particularly in South India, notably in Kerala and Bangalore, as well as across other parts of the country. Additionally, regions such as Kolkata, Nagpur, and the Northeast have shown notable increases in the CASA book.

Making CASA Attractive

In response to customer needs and market dynamics, ESAF SFB has implemented several initiatives. Firstly, the bank has rolled out QR code functionality coupled with sound boxes at competitive rates for all current account holders. Additionally, the bank introduced the ‘Dabba Savings’ account, a unique variant tailored specifically for micro banking customers, aimed at facilitating savings and deposits with the bank.

Thomas shares the details about new products: “To diversify our deposit base, we have launched the FCNR Deposit product, designed to attract more CASA deposits. Furthermore, we have digitalized our doorstep collection services for micro banking customers through our business correspondent partners, enabling convenient savings deposits and micro loan EMI repayments. This initiative not only streamlines transactions but also cultivates a culture of savings within the micro banking segment.”

He adds: “On the relationship front, we have implemented a privilege banking model, offering relationship-based pricing and select service charge waivers based on total relationship value. Lastly, to cater to corporate clients, we’ve introduced a corporate internet banking platform, empowering them to conduct transactions at their convenience.”


There are various factors that will influence the growth of CASA in the future. It will be crucial to expand digitalization, invest in strong digital infrastructure, and provide user-friendly online and mobile banking solutions to attract more CASA deposits. Additionally, financial inclusion initiatives led by the government and targeted outreach programs will create opportunities in rural and underserved areas.

Thomas recommends that SFBs must differentiate themselves through innovative product offerings, superior customer service, and effective marketing strategies to stay competitive and to continue attracting new customers.

He further recommended that educating customers about the benefits of CASA accounts and promoting cashless transactions will be pivotal. Focusing on delivering exceptional customer experiences and integrating ecosystem partnerships will further drive CASA growth, positioning small finance banks for sustainable success in the future.

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