Current and Savings Account (CASA) deposits are cheap for banks because they pay little or no interest. A higher CASA ratio lowers a bank's cost of funds and boosts its net interest margin, so banks compete hard for these deposits.
Formula
CASA Ratio = (Current + Savings Deposits) ÷ Total Deposits × 100
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Example
A bank with 45% of deposits in current and savings accounts has a CASA ratio of 45%.
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Relevant NISM series
IBPS POJAIIBRBI Grade B
See CASA Ratio in exam questions
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