CASA - Current & Savings account ratio
Feb. 4, 2021, 10:12 p.m.
CASA ratio stands for current and savings account ratio. CASA ratio of a bank is the ratio of deposits in current and saving accounts to total deposits. A higher CASA ratio indicates a lower cost of funds, because banks do not usually give any interests on current account deposits and the interest on saving accounts is usually very low 3-4%.
It is used as one of the metrics to assess the profitability of a bank.
HDFC Bank has highest CASA ratio in India followed by SBI.
CASA ratio stands for current and savings account ratio. CASA ratio of a bank is the ratio of deposits in current and saving accounts to total deposits. A higher CASA ratio indicates a lower cost of funds, because banks do not usually give any interests on current account deposits and the interest on saving accounts is usually very low 3-4%.
It is used as one of the metrics to assess the profitability of a bank.
HDFC Bank has highest CASA ratio in India followed by SBI.
If a large part of a bank's deposits comes from these funds, it means that the bank is getting those funds at a relative lower cost. It is generally understood that a higher CASA ratio leads to higher net interest margin.