Low-cost deposit pressure may ease by Q3

Canara Bank is fine-tuning its gold loan portfolio in line with regulatory guidance, based on ongoing discussions, said MD and CEO K. Satyanarayana Raju in a conversation with Narayanan V.

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The flexibility to source low-cost current and savings account (CASA) deposits will likely emerge only by the third or fourth quarter, after factoring in expected rate cuts. Excerpts:

Lenders across the board are focusing on gold loans. Is this a segment you are focusing on as well?

Gold loans have always been a key focus area for us. In fact, 62% of our branch network is located in rural and semi-urban areas, and over 65% of our branches are in South India. These factors give us a strong position to generate consistent demand for gold loans.

Our gold loan portfolio stands at ₹1.81 lakh crore—the largest among all lenders in the country.

Last year, we stopped lending for gold loans for agricultural purposes. Instead, we launched a retail gold loan product for metropolitan customers for consumption purposes, and that product has been well-received.

That is also one of the reasons why our retail advances jumped 43% year-on-year to ₹2.23 lakh crore during Q4FY25.

Our gold loan portfolio grew by 9% last year, following 30% growth in each of the preceding two years. However, we are now fine-tuning our gold lending portfolio by taking cues from regulatory guidelines through discussions or draft norms, which may moderate our growth. That's why we are expecting our gold loan portfolio to grow conservatively at 15%, instead of the 30-35% level.