Public sector lender Canara Bank is betting on a behavioural shift among Indian consumers, from spending and investing in volatile assets to parking more money in bank deposits, as it sharpens its focus on low-cost liabilities and high-yield retail lending.
MD and CEO (In-charge) Hardeep Singh Ahluwalia said the bank expects savings deposits and retail term deposits to see healthy traction in the coming quarters as consumers turn more cautious amid stock market volatility and changing spending patterns.
“With the change in consumer behaviour, we will see more deposits coming into the banking channel,” Ahluwalia told businessline, adding that the bank is already seeing strong momentum in savings and retail deposits.
The dip was largely because last year included a one-time gain of ₹1,930 crore from stake dilution in subsidiaries- Canara HSBC Life Insurance Company Limited and Canara Robeco Asset Management Company. Core banking parameters remain strong,” Ahluwalia said.
In addition, the quarter was also impacted by treasury-related mark-to-market losses amid adverse bond yield movements and equity market corrections. Ahluwalia said the spike in the 10-year G-Sec yield and the fall in equity markets led to treasury losses during the quarter, though he expects the situation to stabilise as yields soften.
The bank is simultaneously recalibrating its liabilities strategy by reducing dependence on bulk deposits and improving the share of retail deposits to protect margins. According to Ahluwalia, Canara Bank reduced its deposit costs by nearly ₹700 crore during the quarter through “cost blending”, helping improve net interest margins by 9 basis points despite the easing interest rate cycle.
On the lending side, the bank continues to aggressively push retail, agriculture and MSME (RAM) loans, which are growing at over 19 per cent and now account for 59 per cent of its overall loan mix. The bank sees the segment as more attractive due to higher spreads and lower concentration risks compared to corporate lending.
Canara Bank is also seeing sustained traction in gold loans, particularly in southern markets, and expects demand to remain strong as lower rates support retail borrowing.
Going ahead, the lender plans to deepen its premium banking and digital lending push, including expanding relationship-led offerings for high-net-worth customers and scaling digital loan journeys across RAM segments.
Published on May 12, 2026