CASA Ratio
Current Account and Savings Account Ratio
Credit & DebtThe share of a bank's total deposits held in current and savings accounts. Current accounts pay no interest and savings accounts pay roughly 3 to 4 percent, so a high CASA ratio means the bank funds its loans with cheap money.
Formula
CASA (%) = (Current Account + Savings Account Deposits) / Total Deposits x 100
Why it matters
A bank funded by fixed deposits at 7 percent and lending at 11 to 12 percent earns about 4 percent. One funded by savings at 4 percent and lending at 12 percent earns 8 percent. Always read CASA together with cost of funds, because a bank can inflate CASA by paying high savings rates.
Indian example
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