We recently met the management of Capital First (CAFL). The proposed merger of IDFC Bank (IDFCB) with CAFL is likely to fructify by mid-FY19, creating a financial services entity with total assets of ~INR1.5t. Over the next 5-6 years, the combined entity is likely to undergo a huge transformation - from a primarily wholesale-focused bank to a retail-focused bank with meaningful CASA deposit franchise. Currently, CASA deposits at IDFCB amount to merely INR43b - 4% of total liabilities. Bulk of the CASA has come in the past four quarters (post demonetization). The management's priority post-merger will be scaling up the CASA franchise.