Value Research Stock Advisor has just released a new stock recommendation. You can click here to learn more about this premium service, and get immediate access to the live recommendations, plus new ones as soon as they are issued.
The CASA (current account and savings account to total deposits) ratio is an important figure for a bank. This is because current accounts and savings accounts are the cheapest source of funds for banks as banks do not pay any interest on current accounts and pay very nominal interest of around 4-6 per cent on savings accounts. The bank sector has witnessed significant changes in the CASA standing in the last four years. The top two leaders in terms of high CASA ratio, HDFC Bank and SBI, have lost their positions to other two other banks, ICICI Bank and Axis Bank, during the same period. The main reason for HDFC Bank losing its position is a significant rise in FDs and FCNR(B) [foreign currency nonresident] deposits on accounts of high interest ratios. On the other hand, ICICI Bank and Axis Bank have attracted huge low-cost deposits.