The spread engine
Cost of funds: what your bank pays for the money it lends out
The blended average rate a bank pays on all its money — its purchase price for the cash it lends out.
4.45%
Blended cost of funds
illustrative
Why it matters
A bank buys money and sells it; this is the purchase price. Every loan must be priced above it — which is why a 0% current account is worth fighting for.
A worked example
Blend ₹100 cr of deposits — 0% current, 3% savings, 7% FDs — and the average works out to ~4.45%. Swap costly FDs for free current accounts and it drops fast. That's why branches chase CASA.
The picture
What it leads to
Where it sits in the map
Follow the causation