interviewer asked about casa which is beneficial to the bank

interviewer asked about casa which is beneficial to the bank

 

because they does not have to give interest on them

 

it was not my question,, it was to other candidate,, but still for discussion answering it.. in current a/c we charge customers for taxes etc... but in saving account the bank businees with our money and just pay 4% interest..

 

it gives loans to other customer on certain interest and give us 4%. banks will profit with this na

 

nahi loans banks time deposit se dete hai longterm k liye but demand deposit se bank ko jyada fayda nahi milta ulta ek liability bni rehti hai that we have to pay back if customer demand it instantiously or if customer withraw instantly

 

Liability to dono accounts me rehti h, current customer ka asset h aur bank ki liability to kisme jyada benefit h bank ko?

 

Liability to dono me h but current se jyada benefit hoga kyuki isme koi interest nahi pay karna h bank ko

 

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%. If a large part of a bank's deposits comes from these funds, it means that the bank is getting those funds at a relative lower cost. It is generally understood that a higher CASA ratio leads to higher net interest margin. In India, it is used as one of the metrics to assess the profitability of a bank.

 

Ha current account jitna jyada hoga cost of fund utna kam aur bank ko profit jyada.