The spread engine

Why branches push CASA (and won't stop asking you to open current accounts)

CASA = current + savings accounts, the cheapest money a bank can raise; branches chase it because every rupee lowers cost of funds and widens margin.

5.3%

Spread, CASA-heavy branch

illustrative

Loan yield9%

Cost of funds (CASA-heavy)3.7%

Spread5.3%

What the bank earns (9%) splits into what its money costs (3.7%) and the margin it keeps — Spread 5.3%.

Why it matters

Current accounts pay 0%, savings ~3%, FDs 7%+. CASA isn't just another cross-sell — it's the most profitable raw material the bank has, and your branch is the only place that makes it.

A worked example

Two branches fund the same ₹100 cr at the same 9% loan yield. The CASA-heavy one runs a 5.3% spread; the FD-heavy one only 3.4% — same loans, more profit, purely from where the money came from.

The picture

What it leads to

Your branch hustle rolls up into the bank's CASA ratio: open accounts → cost of funds falls → NIM widens → CASA ratio rises → the bank is judged more profitable.

Where it sits in the map

Follow the causation

this is the bank-level number your branch effort rolls up intoCASA ratio→this is the cost that CASA pushes downCost of funds→this is the margin that CASA ultimately protectsNet Interest Margin (NIM)→