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Questions and Answers

If Bank of Maharashtra's provisional advances increased significantly in 3QFY25, which of the following would be the most likely short-term effect, assuming the funding for these advances came from existing deposits?

  • An increase in the bank's risk-weighted assets, potentially affecting capital adequacy ratios. (correct)
  • A reduction in the bank's operating expenses due to streamlined lending processes.
  • A decrease in the bank's net interest margin due to higher funding costs.
  • An increase in the bank's liquidity ratio as more cash is deployed.

Which of the following scenarios would pose the greatest risk to Bank of Maharashtra's profitability related to its provisional advances and deposits?

  • Increased competition from other banks leading to a slight reduction in deposit interest rates.
  • A rapid increase in non-performing assets among the provisional advances portfolio, coupled with a decrease in deposit inflows. (correct)
  • Government regulations requiring higher provisioning for standard assets across the banking sector.
  • A stable interest rate environment with consistent deposit growth.

Assuming a constant Cost of Funds, how would a shift in the deposit mix towards a higher proportion of term deposits impact Bank of Maharashtra's Net Interest Margin (NIM)?

  • NIM would increase as term deposits usually have lower interest rates compared to savings accounts.
  • NIM would decrease as term deposits usually have higher interest rates compared to savings accounts. (correct)
  • NIM would remain unchanged as the Cost of Funds is constant.
  • The impact on NIM cannot be determined without knowing the exact interest rates and proportions.

Bank of Maharashtra is considering increasing its lending to small and medium enterprises (SMEs) to boost provisional advances. Which of the following factors should the bank prioritize to ensure sustainable growth and profitability?

<p>Implementing robust credit risk assessment and monitoring processes to manage potential defaults. (A)</p> Signup and view all the answers

If Bank of Maharashtra experiences a sudden surge in deposit inflows in 3QFY25 without a corresponding increase in lending opportunities, what is the most appropriate action the bank should take to manage its funds effectively?

<p>Invest excess funds in liquid, low-risk assets such as government securities or interbank lending. (D)</p> Signup and view all the answers

What was the approximate growth in Gross Advances (YoY) for Bank of Maharashtra in 2QFY24?

<p>23.5% (D)</p> Signup and view all the answers

If Bank of Maharashtra aims to achieve a 25% YoY growth in deposits by 3QFY26, what approximate deposit amount (in INR Crores) would they need to reach, assuming the 3QFY25 deposit amount remains constant?

<p>3,487 (D)</p> Signup and view all the answers

Which of the following statements accurately compares the CASA ratio of Bank of Maharashtra between 3QFY23 and 3QFY25?

<p>The CASA ratio decreased by 3.2 percentage points. (A)</p> Signup and view all the answers

In which of the following periods did Bank of Maharashtra experience the highest YoY growth in Deposits?

<p>1QFY24 (A)</p> Signup and view all the answers

What was the approximate increase in Deposits (INR Crs) from 2QFY24 to 3QFY24 for Bank of Maharashtra?

<p>2729 (B)</p> Signup and view all the answers

What approximate percentage of total Deposits were represented by CASA deposits in 2QFY25?

<p>49.9% (B)</p> Signup and view all the answers

Assuming the trend from 1QFY25 to 3QFY25 continues, would you expect the CASA ratio in 1QFY26 to be higher or lower than 49.3%?

<p>Lower, because the ratio is showing a downward trend (D)</p> Signup and view all the answers

What was the approximate absolute increase in Gross Advances (INR Crs) from 3QFY22 to 3QFY25 for Bank of Maharashtra?

<p>99667 (C)</p> Signup and view all the answers

Which of the following is closest to the average YoY growth in Gross Advances for FY23 and FY24?

<p>22.9% (A)</p> Signup and view all the answers

What was the approximate difference in YoY growth of Deposits between 1QFY24 and 3QFY24?

<p>6.8% (B)</p> Signup and view all the answers

If the Gross Advances growth rate for 1QFY25 were to continue for the next three quarters, what would be the approximate Gross Advances (INR Crs) at the end of 1QFY26?

<p>2,45,000 (C)</p> Signup and view all the answers

During which of the following periods did Bank of Maharashtra demonstrate the highest QoQ growth in Gross Advances?

<p>3QFY25 (C)</p> Signup and view all the answers

If Bank of Maharashtra wants to achieve a CASA ratio of 55% by 3QFY26, what strategies might they implement?

<p>Focus on acquiring more current and savings accounts. (B)</p> Signup and view all the answers

In which of the following periods did Bank of Maharashtra's CASA ratio experience the most significant decrease?

<p>1QFY25 to 2QFY25 (C)</p> Signup and view all the answers

If the bank increased both the growth rate of deposits and advances by 5% from the values achieved in FY24, what would be the approximate growth rate of Deposits and Advances?

<p>Deposits: 20.7%, Advances: 26.7% (B)</p> Signup and view all the answers

What was the approximate growth rate of CSB Bank's gross advances between 3QFY23 and 3QFY24?

<p>17.9% (A)</p> Signup and view all the answers

Which of the following factors most likely contributed to the change in CASA ratio from FY22 to FY24?

<p>A higher growth rate in term deposits compared to current and savings account deposits. (B)</p> Signup and view all the answers

If CSB Bank aims to increase its CASA ratio, which strategy would be most effective?

<p>Focusing on acquiring more current accounts and low-cost savings accounts. (A)</p> Signup and view all the answers

How did the growth rate of deposits change from FY22 to FY24 for CSB Bank?

<p>Increased by approximately 16%. (D)</p> Signup and view all the answers

Considering both advances and deposits, which period shows the highest combined growth for CSB Bank?

<p>FY23 (C)</p> Signup and view all the answers

What is the most likely reason for the advances growth rate to decrease from 30.4% in 1QFY24 to 17.9% in 3QFY24?

<p>Stricter lending norms implemented by the bank. (D)</p> Signup and view all the answers

What general trend can be observed in the CASA ratio of CSB Bank from 3QFY22 to 3QFY25?

<p>A steady decrease. (C)</p> Signup and view all the answers

How much did CSB Bank's deposits grow in INR Crs from 2QFY24 to 3QFY24?

<p>1,906 Crs (B)</p> Signup and view all the answers

What strategic decision might CSB Bank take if they forecast a decrease in deposit growth for the next fiscal year?

<p>Focus on improving CASA ratio to reduce dependency on term deposits. (B)</p> Signup and view all the answers

Considering the trend in Gross Advances, which of the following is the most likely amount of Gross Advances for 1QFY26?

<p>30,950 INR Crs (D)</p> Signup and view all the answers

What is a potential implication of the decreasing CASA ratio for CSB Bank's profitability?

<p>Increased cost of funds. (D)</p> Signup and view all the answers

If the bank's management decides to focus on increasing deposit growth, which measure would likely be MOST effective?

<p>Increasing marketing efforts to attract new customers and offering competitive interest rates (B)</p> Signup and view all the answers

What impact would a significant increase in the bank's Gross Non-Performing Assets (NPAs) likely have on its strategy?

<p>Tighten lending norms and focus on recovering existing NPAs (D)</p> Signup and view all the answers

CSB Bank's YoY growth in deposits has been consistently strong. What is the MOST likely challenge this poses to the bank?

<p>Difficulty in deploying the increased funds profitably (D)</p> Signup and view all the answers

Assuming the bank maintains its current trajectory, which of the following is a plausible estimate for total deposits by the end of FY26?

<p>36,800 INR Crs (D)</p> Signup and view all the answers

What was the approximate YoY growth in Gross Advances for Karur Vysya Bank in 2QFY24?

<p>15.3% (B)</p> Signup and view all the answers

If Karur Vysya Bank aims to achieve a 15% YoY growth in Deposits for FY26, what approximate deposit amount (in INR Crs) would they need to target, assuming FY25 deposits are INR 99,155 Crs?

<p>114,028 (B)</p> Signup and view all the answers

What was the CASA Ratio for Karur Vysya Bank in 2QFY25?

<p>29.5% (A)</p> Signup and view all the answers

Which of the following statements accurately describes the trend of Karur Vysya Bank's CASA Ratio from FY22 to FY24?

<p>The CASA Ratio steadily decreased. (A)</p> Signup and view all the answers

In which period did Karur Vysya Bank experience the highest YoY growth in Deposits?

<p>3QFY25 (D)</p> Signup and view all the answers

What can be inferred about the relationship between growth in Gross Advances and growth in Deposits for Karur Vysya Bank based on the provided data?

<p>There is no consistent relationship between the growth rates of Gross Advances and Deposits. (A)</p> Signup and view all the answers

What was the QoQ growth in Gross Advances in 3QFY25?

<p>3.2% (B)</p> Signup and view all the answers

Which quarter showed the smallest YoY growth in Gross Advances?

<p>3QFY22 (D)</p> Signup and view all the answers

If the trend of CASA ratio decline continues at the same rate as from 3QFY24 to 3QFY25, what would be the approximate CASA ratio in 3QFY26?

<p>27.3% (D)</p> Signup and view all the answers

What was the approximate increase in Deposits (in INR Crs) from 1QFY24 to 3QFY24?

<p>4,950 (C)</p> Signup and view all the answers

Which year had the highest growth in deposits?

<p>FY24 (C)</p> Signup and view all the answers

How much did Deposits increase between FY22 and FY24?

<p>20,627 (B)</p> Signup and view all the answers

How much did Gross Advances increase between FY22 and FY24?

<p>17,584 (D)</p> Signup and view all the answers

In absolute numbers, what was the largest increase in deposits between any two consecutive quarters?

<p>2QFY25 to 3QFY25 (D)</p> Signup and view all the answers

Which statement is incorrect?

<p>CASA ratio has declined every quarter (D)</p> Signup and view all the answers

What was the approximate percentage growth in Gross Advances from 3QFY23 to 3QFY24?

<p>10.8% (C)</p> Signup and view all the answers

Which quarter showed the highest YoY growth in Deposits?

<p>2QFY24 (B)</p> Signup and view all the answers

What is the trend in CASA ratio from 1QFY23 to 3QFY25?

<p>Fluctuating but generally decreasing (D)</p> Signup and view all the answers

If the bank aims to achieve a 15% YoY growth in Gross Advances for FY25, what approximate value of Gross Advances should it target?

<p>INR 92,500 Crs (D)</p> Signup and view all the answers

In which period did the bank experience the most significant decrease in CASA ratio?

<p>2QFY25 to 3QFY25 (B)</p> Signup and view all the answers

What was the approximate total increase in Deposits from 3QFY22 to 3QFY24?

<p>INR 10,807 Crs (A)</p> Signup and view all the answers

Considering the trend in deposit growth, which of the following is the most likely deposit amount for 1QFY26?

<p>INR 1,08,000 Crs (A)</p> Signup and view all the answers

Which of the following factors could explain the decreasing CASA ratio?

<p>Shift from savings accounts to term deposits (D)</p> Signup and view all the answers

In which period did the growth rate of Gross Advances decelerate the most?

<p>3QFY23 to FY23 (C)</p> Signup and view all the answers

What was the approximate average CASA ratio for the FY24 period?

<p>32.5% (B)</p> Signup and view all the answers

If the bank wants to improve its CASA ratio, which strategy would be most effective?

<p>Reducing fees on current account transactions (C)</p> Signup and view all the answers

What was the difference in YoY growth of Deposits between 3QFY22 and 3QFY24?

<p>3.5% (D)</p> Signup and view all the answers

Given the data, which of the following statements is most accurate?

<p>The bank's advances growth rate has generally decreased over the observed period. (D)</p> Signup and view all the answers

How did the deposit amount change QoQ from 2QFY25 to 3QFY25?

<p>Decreased by approximately INR 77 Crs (A)</p> Signup and view all the answers

Compared to the previous year, how was the Gross Advances growth of 3QFY25?

<p>Decreased by 1.1% (B)</p> Signup and view all the answers

What was the approximate YoY growth in Punjab National Bank's gross advances in 2QFY24?

<p>13.4% (B)</p> Signup and view all the answers

Which quarter experienced the highest YoY growth in deposits for Punjab National Bank?

<p>3QFY25 (C)</p> Signup and view all the answers

If Punjab National Bank aims to achieve a 45% domestic CASA ratio by 1QFY26, which of the following strategies would be MOST effective, assuming current trends continue?

<p>Implementing targeted campaigns to attract more current and savings account holders. (A)</p> Signup and view all the answers

In which period did Punjab National Bank's deposit growth (YoY) exceed its advances growth (YoY)?

<p>1QFY23 (C)</p> Signup and view all the answers

Considering the trend in Domestic CASA Ratio from 1QFY23 to 1QFY25, what is a potential concern for Punjab National Bank?

<p>Reduced availability of low-cost deposits for lending. (A)</p> Signup and view all the answers

What was the approximate QoQ growth rate of Punjab National Bank's Gross Advances in 3QFY25?

<p>4.7% (C)</p> Signup and view all the answers

How did the YoY growth in deposits change from FY23 to FY24 for Punjab National Bank?

<p>Decreased by 4.8 percentage points. (C)</p> Signup and view all the answers

Which of the following factors could explain the change in Domestic CASA Ratio from 45.1% in 1QFY23 to 40.1% in 1QFY25?

<p>A shift in customer preference towards term deposits offering higher interest rates. (B)</p> Signup and view all the answers

Which of the following statement accurately describes the relationship between advances growth and deposit growth at PNB?

<p>Advances growth generally outpaces deposit growth, except in certain periods. (D)</p> Signup and view all the answers

A financial analyst observes that PNB's CASA ratio is declining while its advances are growing. What potential risk should the analyst highlight in their report?

<p>Increased liquidity risk due to reliance on more expensive funding sources. (C)</p> Signup and view all the answers

Given the data, which of the following is the most likely reason for the fluctuation in YoY growth rates for both advances and deposits?

<p>External economic factors influencing borrowing and saving behaviors. (D)</p> Signup and view all the answers

If PNB's management sets a target to increase both deposit and advances growth by 2% YoY in FY25, which area should they focus on MOST to achieve this target?

<p>Launching targeted marketing campaigns to attract new customers and increase lending. (A)</p> Signup and view all the answers

Assume that PNB's cost of deposits is directly related to its CASA ratio. If the CASA ratio continues to decline, what is the MOST likely impact on PNB's net interest margin (NIM)?

<p>NIM will decrease due to higher deposit costs. (C)</p> Signup and view all the answers

Suppose PNB wants to reverse the trend of declining CASA ratio. Which of the following initiatives would be most effective in the short term?

<p>Introducing innovative savings schemes with attractive benefits. (B)</p> Signup and view all the answers

Which of the following could be a potential long-term strategy for PNB to sustainably improve its CASA ratio?

<p>Enhancing digital banking services and customer experience. (D)</p> Signup and view all the answers

Flashcards

What are Advances?

Advances are funds lent to borrowers, expected to be repaid with interest.

What are Deposits?

Deposits are funds placed in a bank by customers, forming the bank's liability.

Meaning of 3QFY25

3QFY25 refers to the third fiscal quarter of the fiscal year 2025.

What is INR Cr?

INR Cr stands for Indian Rupees in Crores (1 Crore = 10 million).

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What is Provisional Data?

Provisional data is preliminary; subject to revisions before finalization.

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Gross Advances

Total amount of loans a bank has given out to customers.

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Advances Growth (YoY)

Percentage increase in Gross Advances compared to the same period last year.

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Deposits

Total amount of money customers have placed in the bank.

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Deposits Growth (YoY)

Percentage increase in Deposits compared to the same period last year.

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CASA Ratio

Percentage of a bank's total deposits held in checking (Current) and savings (Saving) accounts.

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3QFY25 Gross Advances

Bank of Maharashtra's Gross Advances in 3QFY25.

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3QFY25 Deposits

Bank of Maharashtra's Deposit amount in 3QFY25

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3QFY25 CASA Ratio

Bank of Maharashtra's CASA ratio in 3QFY25.

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QoQ

Quarter-on-Quarter.

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FY

Fiscal Year

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3QFY22

Third Quarter of Fiscal Year 2022

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4Q

Fourth Quarter

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1Q

First Quarter

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2Q

Second Quarter

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3Q

Third Quarter

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Domestic CASA Ratio

The CASA ratio for deposits within the country.

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FY24 Domestic CASA Ratio

Domestic CASA Ratio for PNB in FY24

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Deposits QoQ Growth

The percentage growth in deposits from one quarter to the next.

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Gross Advances (3QFY25)

The Gross Advances of CSB Bank in 3QFY25 were INR 28,914 Crs.

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CASA Ratio (3QFY25)

The CASA Ratio of CSB Bank in 3QFY25 was 24.1%.

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Quarter-over-Quarter (QoQ) Analysis

Comparing a value in one quarter to its value in the previous quarter.

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Deposits (3QFY25)

The Deposits of CSB Bank in 3QFY25 were INR 33,406 Crs.

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Assets

Total funds owned by the Bank.

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Deposits (QoQ)

Deposits (QoQ) decreased -0.1%.

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What are Gross Advances?

Total amount of loans a bank has given out to borrowers.

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What is Advances Growth (YoY)?

The percentage increase in Gross Advances compared to the same period last year.

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What is Deposits Growth (YoY)?

The percentage increase in Deposits compared to the same period last year.

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What is CASA Ratio?

The percentage of a bank's total deposits held in checking and savings accounts.

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What is a Quarter (Q)?

A period of three months, often used for financial reporting.

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What is meant by "-105 bps"?

When comparing the CASA ratio from 3QFY25 vs 2QFY25, the result was -105 bps.

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What was bank's Advances in 3QFY25?

The bank’s Gross Advances were INR 82,842 Crs.

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What were bank's Deposits in 3QFY25?

The bank’s Deposits were INR 99,155 Crs.

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What is Advances Growth (QoQ)?

The percentage increase in Gross Advances from the previous quarter.

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What was the CASA Ratio in 3QFY25?

Karur Vysya Bank's CASA ratio was 28.4%.

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What was the Advances Growth (YoY) IN 3QFY25?

14.0%

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What was the Deposit Growth (YoY) in 3QFY25?

15.7%

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What was the Advances Growth (QoQ) in 3QFY25?

3.5%

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What is the highest Deposit growth of FY24?

The peak Deposit growth for FY24.

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Study Notes

  • These are study notes regarding the provisional advances and deposits for 3QFY25

Bank of Maharashtra

  • Gross advances are INR 2,28,652 Cr, a 5.1% QoQ change
  • YoY gross advances growth of 21.1%
  • Deposits are INR 2,79,018 Cr, a 1.0% QoQ change
  • YoY deposit growth of 13.5%
  • CASA ratio is 49.3%, a -1 bps change

Punjab National Bank

  • Gross advances are INR 11,11,940 Cr, a 4.7% QoQ change
  • YoY gross advances growth of 15.0%
  • Deposits are INR 15,30,401 Cr, a 4.9% QoQ change
  • YoY deposit growth of 15.6%
  • Domestic CASA ratio is 40.1%

CSB Bank

  • Gross advances are INR 28,914 Cr, a 7.6% QoQ change
  • YoY gross advances growth of 26.4%
  • Deposits are INR 33,406 Cr, a 4.9% QoQ change
  • YoY deposit growth of 22.2%
  • CASA ratio is 24.1%, a -2 bps change

Karur Vysya Bank

  • Gross advances are INR 82,842 Cr, a 3.2% QoQ change
  • YoY gross advances growth of 14.0%
  • Deposits are INR 99,155 Cr, a 3.5% QoQ change
  • YoY deposit growth of 15.7%
  • CASA ratio is 28.4%, a -105 bps change

South Indian Bank

  • Gross advances are INR 86,965 Cr, a 2.6% QoQ change
  • YoY gross advances growth of 11.9%
  • Deposits are INR 1,05,378 Cr, a -0.1% QoQ change
  • YoY deposit growth of 6.3%
  • CASA ratio is 31.2%, a -64 bps change

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