The Reserve Bank of India's latest data reveals that the share of Current Account and Savings Account (CASA) deposits in total bank deposits fell to a two-year low of 37.9% in the December 2025 quarter, declining from 40.1% recorded in December 2023. The savings accounts component declined sharply by 210 basis points to 28.9%.
The decline reflects a structural shift in household savings patterns, with depositors increasingly moving funds towards higher-return instruments including equities, mutual funds, and gold. India's domestic mutual fund industry recorded net inflows of over ₹4.5 lakh crore in 2025-26, while gold prices have surged past ₹1.50 lakh per 10 grams for 24-karat gold.
Banks have responded to the outflow by aggressively issuing Certificates of Deposit (CDs), with total issuance reaching a record ₹15.5 lakh crore in FY2026. The declining CASA ratio puts pressure on banks' net interest margins as they are forced to rely on more expensive wholesale funding sources to meet credit demand.
Banking analysts note that the trend is likely to continue as financial literacy improves and retail investors gain access to diversified investment platforms. However, the Reserve Bank has flagged the situation as a risk to financial stability, urging banks to strengthen their liability management strategies and develop innovative deposit products to retain retail customers.