COMMERCIAL banks are noting that the shift of funds into current and savings accounts (CASA) reflects investors’ lack of confidence in spending or investment, particularly in the stock market.
Kattiya Indaravijaya, president of Kasikornbank (KBank), said people are depositing more money in their accounts now than before, boosting the CASA ratio to 78 per cent of total deposits from last year’s 60 to 70 per cent.
Investment slowdown and temporary shift to bank accounts reflects depositors’ lack of confidence in seeking returns amid relatively high uncertainties, especially in equities and bonds.
Current and savings accounts allow investors and depositors to make quick deposits and withdrawals, providing a flexible and legal way to park money while waiting for a better time to invest.
Kbank’s fast rise in low-cost accounts originates from local uncertainties, including investment fluctuations. Some customers have chosen the bank as their main point for transactions, including deposits, withdrawals, transfers and payment.
“A high number of current and savings accounts could benefit the bank as we will have customers information on record. We can offer credit cards and working capital more easily. This information would not be accessible to us if they used cash. So, what the bank has to do is promote digital banking,” Kattiya said.
Meanwhile, the current and savings account ratio should stay at 60 to 70 per cent, as the bank is encouraging investors to park their money until they are ready to invest. In order to do this, Kbank has to devise suitable campaigns or promotions using QR codes, electronic digital capture (EDC) or digital banking, she added.
Anuwat Luengtaweekul, executive vice president of Thanachart Bank (TBank), said the shift to bank deposits indicates that customers are paying more attention to the banking industry and using it as the key means for financial transactions. This is a good sign for the banking sector, as competition has been relatively high among commercial banks for depositors, with banks requiring customer identification for transactions and to offer financial services.
TBank’s current and savings account ratio has risen to 48 per cent of total deposits from last year’s 30 to 40 per cent, due to customers opting more for online transactions, he said. TBank hopes to record a higher current and savings account ratio and is targeting for 50 per cent this year.
“When the CASA ratio rises sharply, it partly means that customers prefer to park their funds in banks. This also means they have confidence in CASA, as it allows quick transactions without having to pay attention to deposit rates. Hence, every bank wants current and savings account holders, given the low cost of management,” Anuwat said.