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36. KPI in All Industries

36.6 Banking

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Branch interviews ask CASA (current and savings accounts as a share of deposits) and NPA (non-performing loans as a share of loans). This is a fictional class bank. It is not a result of any bank that operates in Maharashtra.

KPI What the number means Who uses it Action it drives
CASA ratio CASA balances divided by total deposits. Branch head A low ratio means costly deposits. Do not fix it by opening empty accounts.
NPA % NPA loan amount divided by the loan book. Credit manager A rising NPA stops the next disbursement until those accounts are called.
New accounts Count of accounts opened. Often a vanity metric on its own. Only with a balance rule An account with no balance is not CASA.

Fictional sample rows. One month. Figures are in ₹ lakh so the table fits. 1 lakh = ₹1,00,000.

Branch City CASA ₹ lakh Deposits ₹ lakh Loans ₹ lakh NPA ₹ lakh New accounts
Camp Pune 40 50 30 1.5 80
Kothrud Pune 20 40 25 3.0 120
CBS Nashik 35 45 20 0.4 40
Gangapur Nashik 15 30 18 2.5 90
Kolhapur Kolhapur 28 36 22 0.8 50
Nagpur Nagpur 22 40 28 4.0 110

Worked from those rows.

  • CASA 160 lakh. Deposits 241 lakh. Loans 143 lakh. NPA 12.2 lakh. New accounts 490.
  • CASA ratio is CASA divided by deposits. 160 ÷ 241 = 66.4%.
  • NPA % is NPA divided by loans. 12.2 ÷ 143 = 8.5%.

Kothrud: CASA 20 ÷ 40 = 50.0%, NPA 3.0 ÷ 25 = 12.0%, and 120 new accounts. Nashik CBS: CASA 35 ÷ 45 = 77.8%, NPA 0.4 ÷ 20 = 2.0%, and only 40 new accounts.

Good KPI Vanity metric
From the same rows Kothrud NPA 12.0% and CASA 50.0% Kothrud 120 new accounts
Why The loan book is the risk. The account-opening drive won the week and worsened nothing visible on that card. CBS opened 40 and has a 2.0% NPA.

What the manager does. The Pune regional manager (fictional class bank) stops the Kothrud account drive and pulls the ₹3 lakh NPA list for a call this week. The Nashik CBS manager does not get a target of 120 accounts to "match Kothrud". Gangapur's NPA is 2.5 ÷ 18 = 13.9%. That branch is the Nashik problem, not CBS.

Ravindra Bagale's Tip

A common mistake is calling "number of bad files divided by number of files" the NPA %, and showing it next to the amount-based NPA % as if they were the same. In interviews say: amount divided by amount. The count is a different metric. Pay attention!