Question
In Banking Industry, what is true about CASA.
i.It stands for Current Account and Saving Account ii.CASA represents the low-cost funds available to the bank iii.Banks pay zero interest on the balances on Current AccountsSolution
CASA ratio of a bank is the ratio of deposits in Current Account (CA) and Saving Accounts (SA) to total deposits. A higher CASA ratio indicates a lower cost of funds, because banks do not usually give any interests on current account deposits and the interest on saving accounts is usually very low 3-4%. Only few banks (e.g. YES Bank and Kotak Mahindra Bank) pay higher interest of around 6% on Saving Account balance.
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