CASA Ratio Meaning: How to Read Low-Cost Deposits in Indian Bank Results

Getting the CASA ratio meaning right is easy; reading it right is where people slip. The ratio is the share of a bank’s total deposits held in current accounts and savings accounts, the two cheapest pools of money a bank can tap. That share drives what the bank pays for its funding, so it’s one of the first lines analysts look at when banks report. In this guide we cover how the ratio is worked out, why regulation keeps CASA cheap, how to read it next to other numbers when you analyse quarterly results of a company, and what the provisional bank filings for the September 2026 quarter say about it.

The bank figures here come from the banks’ own provisional Q2 FY27 business updates, either as filed or as reported by the outlets we name. The regulatory points come from the Reserve Bank of India. Every bank number quoted is provisional and subject to audit, as the filings themselves say.

CASA ratio meaning: how the formula works

CASA is short for current account and savings account. The Economic Times explainer on the CASA ratio lists the three main deposit types that fund a bank (current accounts, savings accounts and term deposits) and defines the ratio as the part of total deposits held in current and savings accounts. Written as a formula:

CASA ratio (%) = (Current account deposits + Savings account deposits) ÷ Total deposits × 100

Try it with real filed numbers. Bandhan Bank reported CASA deposits of ₹46,131 crore and total deposits of ₹1,72,689 crore as of 30 September 2026, according to Kotak Neo’s report on Bandhan Bank’s Q2 FY27 update. Divide one by the other and you get 26.71%, exactly the CASA ratio the bank disclosed.

YES Bank checks out the same way. Kotak Neo’s YES Bank Q2 FY27 report has CASA deposits at ₹1,06,255 crore and total deposits at ₹3,54,084 crore. That works out to roughly 30.0%, in line with the 30% CASA ratio in the update.

We’d recommend doing this division yourself, because it won’t always match the headline to the decimal. Central Bank of India’s exchange filing of key provisional figures for Q2 FY27 shows CASA deposits of ₹2,26,747 crore against total deposits of ₹5,08,586 crore. That divides to about 44.58%, yet the bank’s reported “CASA %” is 44.70. The filing doesn’t say what base it uses, so a small gap like this is a nudge to check the footnotes or the investor presentation, not proof of a mistake. Banks can and do calculate the ratio on slightly different bases, for example domestic versus global deposits, or leaving out certain deposit types.

Why CASA money costs a bank so little

This isn’t just how the market happens to work; it’s built into the rules. The Reserve Bank of India’s FAQs on the Master Direction on Interest Rate on Deposits, 2025 say banks can take interest-free deposits only in current accounts. So current account balances cost the bank nothing in interest. As the ET explainer notes, they’re operational accounts that can be drawn on without notice, which is why businesses run their everyday payments and collections through them.

Savings accounts do pay interest, but each bank sets its own rate. The RBI deregulated the savings bank deposit interest rate from October 25, 2011. Under those guidelines a bank has to pay one uniform rate on savings balances up to ₹1 lakh, and can pay different rates above ₹1 lakh as long as it doesn’t discriminate between similar deposits taken on the same date. Put the two together and, as the ET explainer says, current and savings deposits are generally a cheaper source of funds for a bank.

Term deposits sit at the opposite end. The depositor ties money up for a fixed period and may pay a penalty to pull it out early, and the bank pays for that commitment through its term-deposit rate. If most of a bank’s deposit growth comes from term deposits, or from bulk deposits and certificates of deposit, its average cost of funds usually climbs even when total deposits look fine.

A rising deposit total is not the same as cheaper funding. The CASA ratio tells you what kind of money the growth is made of.

From CASA to margins: the link

A bank earns the difference between what it charges borrowers and what it pays for funds. Measure that difference against earning assets and you have the net interest margin (NIM). The Economic Times explainer draws the line straight: since CASA is generally cheaper money, a higher CASA ratio tends to support a better net interest margin, though actual profitability depends on other costs too.

Here’s how it plays out for a made-up bank with ₹10,000 crore of deposits. Purely for the arithmetic, say current accounts cost 0% (in line with the RBI rule above), savings accounts cost 3% and term deposits cost 7%. These rates are our assumptions for illustration, not any real bank’s.

• Scenario A: CASA ratio 40% (10% current, 30% savings, 60% term). Weighted cost of deposits = 0.30 × 3% + 0.60 × 7% = 0.9% + 4.2% = 5.1%.
• Scenario B: CASA ratio 30% (10% current, 20% savings, 70% term). Weighted cost = 0.20 × 3% + 0.70 × 7% = 0.6% + 4.9% = 5.5%.

So in this example, a 10-percentage-point fall in the CASA ratio pushes the cost of deposits up by 40 basis points. If lending yields don’t move, nearly all of that comes straight off the margin. Real banks are messier: savings rates vary by balance slab, term deposits reprice only as they mature, and banks borrow outside deposits as well. But the direction of the effect is exactly why the market keeps such a close eye on the CASA line.

What the September 2026 quarter filings tell us

In the first few days after a quarter closes, Indian banks file provisional business updates with the exchanges, well before full results. These usually include advances, deposits and, at many banks, CASA. The Q2 FY27 batch shows nicely why the ratio needs a careful read.

Bandhan Bank. According to Kotak Neo, CASA deposits grew 4.3% year-on-year to ₹46,131 crore but slipped 4.8% from ₹48,479 crore at the end of June. Total deposits rose 9.2% year-on-year and 4.7% quarter-on-quarter. The upshot: the CASA ratio fell to 26.71% in September, from 29.40% in June and 27.97% a year ago.

YES Bank. CASA deposits rose 6.6% year-on-year and 2.9% quarter-on-quarter to cross ₹1 lakh crore. Even so, the CASA ratio dropped to 30% from 32.7% in June and 33.7% a year earlier, because total deposits grew faster, by 19.5% year-on-year and 12.3% quarter-on-quarter, per the same Kotak Neo report. On its normalised basis, which strips out FCNR(B) deposits and related funding from its GIFT City operations, the bank put the CASA ratio at 31.7%, against 32.8% in June.

Central Bank of India. Its filing shows CASA deposits up 9.21% year-on-year while total deposits grew 14.43%. The CASA percentage stood at 44.70 on 30 September 2026, down 213 basis points from 46.83 a year earlier and below the 47.30 it reported on 31 March 2026.

IDFC FIRST Bank. This one moved the other way. Its CASA ratio rose to 51.3% from 50.1% a year earlier, on a basis that leaves out leveraged FCNR(B) deposits, according to Kalkine’s summary of the bank’s Q2 FY27 filing.

Zoom out to the whole sector. A StockWatch compilation of 29 banks’ provisional Q2 FY27 filings found 19 banks that disclosed CASA growth along with total deposit growth, and at 16 of those 19, CASA grew more slowly than deposits overall. Kotak Mahindra Bank (CASA +11.3% versus deposits +23.2%) and Axis Bank (CASA +10.6% versus deposits +20.7%) are among its examples. Just three grew CASA faster than total deposits: Union Bank of India (+14.7% versus +6.9%), AU Small Finance Bank (+29.1% versus +28.6%) and Karnataka Bank (+14.9% versus +12.0%), with Karnataka Bank’s CASA share up 80 basis points year-on-year at 31.81%. The same compilation puts median advances growth at 22.7% against median deposit growth of 17.0% across the 29 banks. Its Central Bank, YES Bank and IDFC FIRST numbers match the filings and reports cited above.

Five rules for reading CASA in bank results

1. Look at the ratio and the rupee amount together

YES Bank shows why. Its CASA deposits went up in rupee terms, but the ratio fell because term money grew faster. A falling ratio doesn’t always mean customers are emptying their current and savings accounts. Sometimes the bank has simply raised a lot of other deposits. Bandhan’s September quarter is a different story: there the CASA balance itself shrank quarter-on-quarter, which is the weaker signal.

2. Compare growth rates, not only levels

The quickest clean test is whether CASA grew faster or slower than total deposits. If CASA trails, each new rupee of deposits costs more than the existing book, and the average cost of funds will creep up over time. That’s why the StockWatch finding, 16 of 19 banks with CASA lagging, tells you more about future margins than any one bank’s level does.

3. Period-end or average?

Quarter-end numbers can be pumped up or dragged down by a few days of big inflows or outflows, especially in current accounts, which businesses shuffle around all the time. If a bank also gives average CASA in its full results or investor presentation, set that against the period-end figure. When the two are far apart, the average is the better guide to what the bank really paid for its funds during the quarter.

4. Check what the calculation is based on

This quarter is a good illustration. YES Bank and IDFC FIRST both gave figures adjusted for FCNR(B) deposits, and the StockWatch compilation notes that several banks flagged FCNR(B) deposits tied to the RBI’s swap facility. Central Bank’s reported CASA percentage is a touch different from a plain division of its two filed lines. Before you put two banks side by side, make sure it’s like for like: global or domestic, headline or normalised.

5. Be careful comparing very different business models

A bank built on retail microfinance borrowers, one with a big corporate current-account franchise and one that grew mostly by paying higher term-deposit rates will naturally run different CASA ratios. The more useful comparison is usually the same bank over time, or banks with similar models. Put the CASA trend next to asset-quality numbers like GNPA and NNPA and the reported NIM, and you’ll see whether cheap funding is actually becoming profitable, clean lending.

The best use of the CASA ratio is as a trend line for one bank, read beside its margin and deposit-cost lines, not as a league table.

What the CASA ratio won’t tell you

A high CASA ratio usually helps margins, but it doesn’t guarantee quality. A bank can have cheap deposits and still lend poorly, and the saving vanishes fast once credit costs rise. Equally, a lower CASA ratio isn’t automatically a warning sign. A bank that deliberately pays more for long-term deposits may be buying stable funding, and some business models just pull in fewer current accounts.

On its own, the ratio says nothing about liquidity either. Savings and current balances can be withdrawn on demand, which is partly why they’re cheap. Regulatory liquidity measures such as the liquidity coverage ratio deal with that separately (Bandhan reported about 137.88% and IDFC FIRST an average of 125% for the quarter, per the reports cited above).

One last thing: the provisional updates only give volumes. As the StockWatch compilation points out, there’s no margin or pricing data in them. Whether a CASA slide actually hurt earnings only becomes clear when full quarterly results show the cost of deposits and the NIM.

Your results-season checklist

• Work out the CASA ratio yourself from the filed CASA and total deposit figures, and note any gap with the headline number.
• Set CASA growth against total deposit growth, both year-on-year and quarter-on-quarter.
• Look for average CASA in the investor presentation, not only the quarter-end number.
• Read the footnotes for adjusted or normalised bases, such as FCNR(B) exclusions.
• Check the cost of deposits and NIM in the full results to see whether the CASA trend has already reached the margins.
• Follow the same bank over several quarters before drawing any conclusions.

Read like this, the CASA ratio stops being a trivia number and becomes an early warning. It tells you whether a bank’s funding is getting cheaper or dearer before the margin line confirms it. Pair it with the margin, asset-quality and profit lines covered in our results guide, linked at the top of this article.

This article is for education only and is not investment advice. Bank figures cited are provisional and subject to audit.