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 Accounts
CASA ratio of a bank is the ratio of deposits in current and saving accounts 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.