CASA Ratio

CASA is a key profitability metric for banks because current and savings accounts pay only 3-4% interest, while term deposits pay 7-8%. A higher CASA ratio means lower interest expense and better net interest margins. Most public sector banks in India have a CASA ratio around 38-42%, while private sector banks like HDFC Bank and ICICI Bank have 40-45%. Digital-only banks and small finance banks target higher CASA ratios to remain competitive.