SBI wooing depositors with value added services

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Depositor is king that's the new banking war cry. Even as ICICI Bank promises 8% for a 390 day deposit, SBI is all set to dangle a juicy carrot for the 5-10 year tenure. SBI says it will even wean away investors from  post office savings, reports CNBC-TV18.

SBI, Managing Director, T S Bhattacharya summing up the predicament of the banking sector today. With credit demand continuing to rise at over 31%  YoY, and deposit growth still way lower at 20%, banks are returning to woo king depositor. 

Even as ICICI Bank goes to town with its 8% for 390 days deposit. Big daddy State Bank is preparing to offer a 5 to10 year deposit, which along with the tax incentive will be as attractive as the post office deposit, says Bhattacharya.

"It will be sufficiently attractive. People go for 15 year deposits, 15 lakhs per head in post offices. we will try and see that retired people in future instead of going to post offices will come to us," said T S Bhattacharya, MD at SBI.

The other key depositor that SBI will seek to entice is the NRI. Already SBI accounts for 22-23% of total NRI deposits. And the aim is to take it higher by providing a slew of value added services like payment gateways demat accounts and online trading.

"We are doing our best to set up the payment gateways. We are working primarily for the payment gateways. So that someone from Canada can seamlessly transfer money to India and the reverse. The whole set of our NRI servieces, we are trying to revamp and reposition," said T S Bhattacharya, MD at SBI.

In fact the idea is to provide these add ons to Indian depositors as well. For big NRI depositors the bank is also looking to provide increditble add ons like free remittance.

"We also feel that if the relationship is for a long duration with SBI and if deposits are substantial, then we could provide additional free services to them. This is going to be a real attraction. we could really consider giving them free remittances," said M M Lateef, Deputy MD and CFO at SBI.

The 5-10 year deposit product should be launched within a month while the payement gateways and equity trading add ons may take a couple of months. After a gap of nearly 5 years, king depositor returns to the throne. Not just higher deposit returns but also prompt and value added services.