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      Question

      A decline in CASA ratio may

      indicate:
      A Increase in fee income Correct Answer Incorrect Answer
      B Higher share of term deposits Correct Answer Incorrect Answer
      C Increase in digital adoption Correct Answer Incorrect Answer
      D Better service quality Correct Answer Incorrect Answer
      E Higher CLV Correct Answer Incorrect Answer

      Solution

      CASA ratio measures proportion of low-cost current and savings accounts. Increase in term deposits lowers CASA ratio.  Why Other Options Are Incorrect • A: Fee income unrelated. • C: Digital adoption doesn’t reduce CASA directly. • D: Service quality not linked directly. • E: Long-term profitability metric.  Banking Example: Customers shifting funds from savings to fixed deposits.

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