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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%. 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. In India, it is used as one of the metrics to assess the profitability of a bank.

Formula

${\displaystyle {CASARatio}=\left({\frac {CASADeposit}{TotalDepositsplusCASA}}\right)}$

CASA ratio of some Indian banks

See also

• Banking in India

References

1. R. Narayanaswamy (2 April 2014). Financial Accounting: A Managerial Perspective. PHI Learning. p. 589. ISBN 978-81-203-4949-0. Retrieved 8 May 2015.
2. "What is CASA ratio?". The Economic Times. 10 May 2009. Retrieved 8 May 2015.
3. "Banks' CASA deposits grow 33%: What it means". Yahoo. 28 November 2013. Retrieved 8 May 2015.
4. "SBI Closed 41 Lakh Savings Bank Accounts Between April And January". NDTV. March 21, 2018. Retrieved Feb 2, 2020.
5. "Yes Bank-Annual-Report 2018". Yes Bank. April 30, 2018. Archived from the original on September 29, 2018. Retrieved May 7, 2018.
6. "Kotak Mahindra Bank - Q4FY18 Results" (PDF). Kotak Mahindra Bank. April 30, 2018. Retrieved May 7, 2018.
7. "IndusInd Bank Q4 net rises 25%". The Hindu Business Line. 16 April 2015. Retrieved 8 May 2015.

Further reading

• "What is CASA ratio?". The Economic Times. 10 May 2009.
• "De-jargoned: CASA". Live Mint. 6 February 2013.

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