India Ratings said SBI had reported growth of 21 per cent in advances, and 15 per cent in deposits last year. The rating agency said the if credit and deposit growth remained same in the current fiscal year also, with deposits lagging credit growth, then it will lead to an increase in wholesale deposits.
Further, the already-stretched loan-to-deposit ratio would limit the incremental margin gain on this account and that would impact cost of funds for the bank and hence its margins.
Cost of funds matter a lot for SBI as it has a strong stable retail deposit franchise. The domestic current account and savings account (Casa) deposit ratio stood at 45.5 per cent of the total deposits in December 2012 (Q3FY13) with savings account deposit at 38 per cent — the highest in the system, said the rating agency.