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What is significance of CASA ratio for a bank?

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What is significance of CASA ratio for a bank?

Current Account Savings Account Ratio The percentage of total bank deposits that are in a CASA is an important metric to determine the profitability of a bank. The CASA ratio indicates how much of a bank’s total deposits are in both current and savings accounts.

What is the benefit of high CASA for banks?

A higher CASA ratio means that the bank has a higher share of deposits in current and savings accounts. A higher CASA ratio also indicates a better operating efficiency of the bank. In India, this ratio is used as one of the metrics to determine the profitability of the banks.

Which bank has the highest CASA ratio?

Bank has to pay no interest on current accounts and lower interest on a savings account. Hence, the higher the CASA ratio, the better is the profitability of the bank. Kotak Mahindra Bank has the highest CASA ratio on the back of its successful retail campaign.

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What are the disadvantages of having high CASA for a bank?

What are the disadvantages of high CASA ratio? CASA deposits can move out of banks’ books anytime, leading to asset-liability mismatches. While in case of term deposits, banks are almost certain that the depositor may not withdraw money before the maturity of the deposit and may also renew the deposit on maturity.

How do I increase my bank casa?

5 Effective Tips to Increase Deposits

  1. Customer Research. To begin with, research is key.
  2. Promote Popular Draws. Through surveys, try to find out what entices people to deposit money in your FI.
  3. If Possible, Offer a Higher Deposit Rate.
  4. Go Local.
  5. Enlist First-Rate Software.

What is CASA ratio of HDFC Bank?

HDFC Bank’s CASA ratio stood at around 47\% as of September 30, 2021, as compared to 41.6\% as of September 30, 2020 and 45.5\% as of June 30, 2021.

How do you increase CASA ratio?

Banks can increase CASA ratio by offering a higher rate of interest on deposits which can attract more deposits, on the other hand it will have to pay higher interest rates to the depositors.

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Which bank has highest CASA ratio in India?

CASA ratio

Bank CASA Ratio Date
HDFC Bank 52\% 2017
SBI 43.81\% 2017
Yes Bank 26\% 2020
Axis Bank 40\% September 2014

How can Branches improve CASA ratio?

Solutions for Increasing CASA Ratio of Bank

  1. Importance of CASA in banks.
  2. Presence of banks and customer preference.
  3. E-lobbies and their importance in banks.
  4. Targeted customer marketing.