new delhi the share of savings and current account deposits in the kitty of most banks has dropped significantly in the first six months of fiscal 200809 for banks these deposits are important as they are the cheapest source of cash with this supply dwindling banks may not be able to reduce their lending rates sharply the share of current and savings deposits or casa deposits has come down by 24 percentage points for most banks according to finance ministry figures the countrys biggest bank state bank of india has seen the share of casa deposits drop by about 3 percentage points between march and september 2008 the share of casa deposits in bank of baroda bank of india canara bank and oriental bank of commerce has also reducedbanks keep on devising ways to increase the share of casa deposits because a drop in supply hits their bottom line in the long run lower ratio of casa reflects in higher cost of funds for a bank it may also affect the yield profitability of the bank from its advances or loans uco bank executive director v k dhingra saidcasa deposits are a banks cheapest source of funds because it pays an interest rate of 35 on savings accounts and zero interest on current accounts banks have been offering attractive rates to fixed deposits to mobilise more funds fixed deposits of more than one year till last month fetched a return of 105 rates were even higher for bulk deposits this has encouraged depositors to shift funds from savings and current accounts to fixed depositsthere has been a fall in the ratio of casa deposits because of high interest rate on fixed deposits the facility of flexideposits also attract customers towards term and fixed deposits said an official in oriental bank of commerce who did not wish to be identifiedflexideposits are fixed deposits that earn the investor a fixed interest rate besides he is allowed to partially withdraw money before the maturity period in fixed deposits if the money is withdrawn before the term a penalty is imposed on the depositor banks are adopting innovative ways to keep the ratio of casa deposits high many are now targeting the unorganised sector