Banking
CASA ratio
The share of deposits held in low-cost current and savings accounts.
Last reviewedWhat does CASA ratio mean?
CASA stands for current account and savings account. The CASA ratio is these deposits divided by total deposits, a term used most in India and other parts of Asia. Current accounts pay little or no interest, and savings accounts pay less than fixed (term) deposits, so a high CASA ratio means cheap funding and a wider net interest margin. Example: a bank with 400 in current and savings accounts and 600 in term deposits has a CASA ratio of 40 percent. Banks chase salary accounts and everyday payments because customers who transact often keep money in CASA.
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Related terms
- Net interest margin (NIM)What a bank earns on its loans and investments after paying for its funding, as a share of those assets.
- Deposit betaThe share of a change in policy interest rates that a bank passes on to depositors.
- Loan-to-deposit ratio (LDR)Loans divided by deposits: how much of its deposit base a bank has lent out.
- Cost-to-income ratioOperating costs as a share of operating income. Lower means a more efficient bank.
- Cost of riskLoan loss charges as a share of loans, usually quoted in basis points.
- Non-performing loan (NPL) ratioThe share of a bank's loans that borrowers have stopped paying.
- CET1 capital ratio (and risk-weighted assets)A bank's highest-quality capital as a share of its risk-weighted assets.
- Liquidity coverage ratio (LCR)Whether a bank holds enough easy-to-sell assets to survive 30 days of stress.