CASA ratio explained
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%.[1] 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.[2] [3]
Formula
{CASARatio}=\left(
| CASADeposit |
| TotalDepositsplusCASA |
\right)
CASA ratio of some Indian banks
CASA ratio of select banks| Bank | CASA Ratio | Date |
|---|
| 43.81% | 2017 [4] |
| 26% | 2020 [5] |
| 51% | March 2018[6] |
| 83.3% | February 2017[7] |
| 51% | January 2019 |
| 28.91% | March 2020 |
| 42.00% | March 2021[8] | |
See also
Further reading
Notes and References
- Book: R. Narayanaswamy. Financial Accounting: A Managerial Perspective. 8 May 2015. 2 April 2014. PHI Learning. 978-81-203-4949-0. 589.
- News: What is CASA ratio?. 8 May 2015. The Economic Times. 10 May 2009.
- News: Banks' CASA deposits grow 33%: What it means. 8 May 2015. Yahoo. 28 November 2013.
- News: SBI Closed 41 Lakh Savings Bank Accounts Between April And January. March 21, 2018. NDTV. Feb 2, 2020.
- News: Yes Bank-Annual-Report 2018. April 30, 2018. Yes Bank. May 7, 2018. https://web.archive.org/web/20180929194901/https://www.yesbank.in/pdf/annualreport_2017_18_pdf. September 29, 2018. dead.
- News: Kotak Mahindra Bank - Q4FY18 Results. April 30, 2018. Kotak Mahindra Bank. May 7, 2018.
- News: Bank Alfalah posts profit after tax of Rs.7.9bn with EPS of Rs.4.96. 9 Jan 2018. Business Recorder. 24 February 2017.
- News: IndusInd Bank Q4 net rises 25%. 8 May 2015. The Hindu Business Line. 16 April 2015.
