← Business Metric: Financial (all topics)
CASA (current & savings account) ratio
What it is
The share of current and savings account balances in total deposits. CASA is the cheapest funding a bank has - current accounts pay nothing and savings accounts pay a low administered rate - so a high ratio directly lowers cost of funds
It is the standard proxy for franchise quality, because transaction and salary relationships cannot be bought the way a term deposit can
Impact on industries
- The single largest structural driver of net interest margin - a bank funded by CASA can lend at the same rate as a peer and earn a wider spread
- Sticky and relationship-led, so it does not reprice on every rate move the way bulk and term deposits do
- Under structural pressure - savers are moving to term deposits and markets, with mutual fund AUM up ~30% in FY26 and SIP flows above Rs 32,000 cr a month
- Erosion is uneven - mid-sized banks and SFBs without deep branch franchises replace CASA with costlier corporate money that is shorter tenor and rate-sensitive