India’s CASA ratio — the low-cost deposit share that drives bank margins

Q: Why is India's CASA ratio falling?

The CASA ratio is falling mainly because term (fixed) deposits now pay much higher interest than savings accounts after the RBI's rate-hike cycle, so households and businesses shift idle savings into term deposits to earn a real return. The CASA share peaked near 44% in the ultra-low-rate FY22, when term deposits were unattractive, and has drifted down toward about 38% by FY25. Competition for deposits and a move toward other assets (equities, mutual funds) add to the pressure. Figures are rounded and approximate and vary by bank.

Q: Why does the CASA ratio matter for banks?

CASA is the cheapest, most stable source of bank funding, so the CASA ratio directly shapes a bank's cost of funds and therefore its net interest margin (NIM). When the CASA ratio falls, banks must fund more lending with higher-cost term deposits, which raises their cost of funds and squeezes margins -- especially when bank credit is growing faster than deposits and the credit-deposit ratio is tight. That is why a sustained decline in the CASA share is a structural headwind for bank profitability, and why banks compete hard for salary accounts and transaction balances that build CASA.

Q: What counts as CASA vs term deposits?

CASA = Current Account + Savings Account balances. Current accounts (mainly businesses) pay no interest; savings accounts pay a low regulated/administered rate. Everything else -- fixed deposits, recurring deposits and other time deposits -- is term (time) deposits, which pay higher, tenor-linked interest. The CASA ratio is CASA divided by total deposits. The exact figure depends on the bank and on whether period-end or average balances are used, so system-wide numbers here are rounded and approximate.

Quick answerThe CASA ratio is the share of bank deposits held in current and savings accounts — cheap, sticky funding that pays little or no interest. In India the system-wide CASA share peaked near 44% in FY22, when ultra-low rates made term deposits unattractive, and has since drifted down toward about 38% by FY25 as the RBI’s rate hikes pulled savers into higher-yielding term deposits. A falling CASA ratio raises banks’ cost of funds and pressures net interest margins — a key structural headwind for profitability. Figures are official, rounded, approximate and revised periodically.

The chart shows the system-wide CASA ratio (% of aggregate deposits) by fiscal year. The table below carries the same figures so the page is readable without JavaScript — for accessibility and AI answer engines.

CASA ratio — current + savings share of aggregate deposits (%)

Fiscal year	CASA ratio	Note
FY21	~42%	Pandemic liquidity and ultra-low deposit rates lift CASA
FY22	~44%	Peak CASA share -- term deposits unattractive at rock-bottom rates
FY23	~42%	Rate-hike cycle begins; savers start shifting to term deposits
FY24	~40%	CASA under pressure as high term-deposit rates pull funds away
FY25	~38%	CASA share near multi-year low (~37-39%) -- cost of funds rises

Metric: current-account + savings-account balances as a share of aggregate deposits of scheduled commercial banks (RBI / DBIE). All figures are rounded and approximate; the exact ratio varies by bank and by whether period-end or average balances are used, and recent years are provisional and revised. For exact latest figures see the source linked below.

What it means for bankers

The CASA ratio is the single clearest lens on a bank’s funding cost. Current and savings balances are the cheapest money a bank can lend out, so a high CASA share lifts the net interest margin and a falling share squeezes it. The decline since FY22 is the mirror image of the repo-rate cycle: as policy rates rose, term-deposit rates climbed well above the administered savings rate, and rational savers moved idle balances into fixed deposits — lifting the real deposit rate but shrinking CASA. This bites hardest when bank credit is outpacing deposit growth, forcing banks to chase costlier bulk and term deposits to fund loans. That is why banks compete aggressively for salary accounts, transaction balances and corporate current accounts, and why CASA is watched alongside the credit-deposit ratio as a gauge of funding quality. A stabilising or rising CASA share, by contrast, signals cheaper, stickier funding and supports margins.

Key terms in this dataPlain-English definitions of the terms behind this dashboard — see the full Indian banking glossary. Credit-deposit ratio · Scheduled commercial bank

More live dataExplore BankPulse’s other live RBI dashboards: Net Interest Margin (NIM) · SCB Deposits (Demand vs Time) · Real Deposit Rate · Credit & Deposit Growth · Repo Rate.

India CASA ratio FAQ

What is the CASA ratio?

The CASA ratio is the share of a bank's deposits held in Current and Savings Accounts (CASA) rather than fixed/term deposits. CASA balances pay little or no interest, so they are low-cost, sticky funding. A higher ratio means cheaper funding and better margins. India's system-wide CASA ratio is roughly 38% on the latest readings.

Why is India's CASA ratio falling?

Because term deposits now pay much more than savings accounts after the RBI rate-hike cycle, so savers move idle balances into fixed deposits for a real return. The CASA share peaked near 44% in the ultra-low-rate FY22 and has drifted toward ~38% by FY25. Competition for deposits and flows into equities/mutual funds add pressure. Figures are rounded and approximate.

Why does the CASA ratio matter for banks?

CASA is the cheapest, most stable funding, so the CASA ratio drives a bank's cost of funds and net interest margin (NIM). A falling CASA share forces banks to fund lending with costlier term deposits, squeezing margins -- especially when credit outpaces deposits and the credit-deposit ratio is tight. A sustained decline is a structural headwind for profitability.

What counts as CASA vs term deposits?

CASA = Current + Savings Account balances; current accounts pay no interest and savings accounts a low rate. Everything else -- fixed, recurring and other time deposits -- is term deposits, paying higher tenor-linked interest. CASA ratio = CASA / total deposits. The exact figure varies by bank and by period-end vs average basis, so system-wide numbers here are rounded and approximate.

Methodology & sources: see how BankPulse dashboards are sourced, verified & updated · machine-readable CASA-ratio JSON feed.

Last reviewed 19 Jun 2026 by Vikram Jain

Source: RBI / DBIE — banking-statistics data on the composition of scheduled-commercial-bank deposits (current, savings and term deposits), rbi.org.in. The CASA ratio is current + savings balances as a share of aggregate deposits; figures are rounded and approximate, vary by bank and by period-end vs average basis, and recent years are provisional and revised. We never reproduce source text verbatim. Reviewed by Vikram Jain. Last updated 19 Jun 2026, 05:39 IST.