In a bid to improve its profit margins, Oriental Bank of Commerce, is working on a strategy to re-price its high cost deposits. It is also contemplating improving its current account and savings account deposits (CASA). However, the immediate focus is on high cost deposits.

The bank has already reduced the interest rates on its high cost deposits from the current 12 percent to 6 percent. Rathnakar Hegde, ED, said, "This exercise will give us a cost savings of about 600 basis points and would help in bringing down the cost of deposits to below 7%."

OBC's current net interest margin (NIM) is 2 percent and repricing would increase it to 2.2 percent in the current fiscal.

The bank saw a significant drop in its CASA deposits from 32.6% in 2005-06 to about 23.7% in 2008-09. Hegde said that though the deposits have decreased in percentage terms, they have increased in absolute terms.

The bank has set a target of taking its deposits to 25 % by 2010 and 30 percent by March 2012.

The centre has also directed the PSBs to focus more on CASA deposits. It has asked the state-run banks for their CASA targets. According to bankers CASA deposits of most of the public sector banks were slated for an increase of 17-20 percent for the current financial year.