CASA ratio stands for
current
Currents, Current or The Current may refer to:
Science and technology
* Current (fluid), the flow of a liquid or a gas
** Air current, a flow of air
** Ocean current, a current in the ocean
*** Rip current, a kind of water current
** Current (hydr ...
and
savings account
A savings account is a bank account at a retail banking, retail bank. Common features include a limited number of withdrawals, a lack of cheque and linked debit card facilities, limited transfer options and the inability to be overdrawn. Traditi ...
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
India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
, it is used as one of the metrics to assess the profitability of a bank.
Formula
CASA ratio of some Indian banks
See also
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Banking in India
Modern banking in India originated in the mid of 18th century. Among the first banks were the Bank of Hindustan, which was established in 1770 and liquidated in 1829–32; and the General Bank of India, established in 1786 but failed in 1791. ...
References
Further reading
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Financial ratios
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