The festive season has arrived and banks are back again luring its customers with discounts and cashbacks through their product offerings.
A few weeks ago, the largest bank State Bank of India (SBI) announced a waiver up to 100 percent of processing fee on car loans, personal gold loans and personal loans.
Last week, country’s largest private lender ICICI Bank started offering a festive cashback offer on its debit and credit card spends for its customers availing home loans for three months from September 1 to November 30.
Meanwhile, its peer HDFC Bank has started EasyEMI offer with a pre-approved loans starting from Rs 10,000 to their 8 million debit card customers to make purchases on major e-commerce sites during their festive sales. It can be used to buy consumer durables, consumer electronics, mobiles, furniture, fitness equipment; booking flight and train tickets; and availing medical treatment.
According to a private bank official who requested anonymity, such offerings do help push some growth. Although a loan is not bought with the idea of such discounts in mind and borrowers buy when there is a need, banks do ensure they at least cash in on it by waiving off their processing charges during such periods.
Banks are pushing retail loans to grow their balance sheet, especially through credit cards and personal loans, which has grown over 30 percent in the past one year. This also comes at a time when the corporate loan growth is muted across the banking sector and banks are grappling with recovery of high non-performing assets (NPAs).
Retail loan growth, led by personal (35.7 percent), credit card (32.5 percent) and some rise in home loans (10.5 percent), for the banking sector stood at 15 percent year-over-year in July as against an 18 percent growth last year.
As people do most of their spending during this festive season, banks are also cashing in on the online retailers by offering cash backs and additional discounts on their credit cards.
Adhil Shetty, CEO of Bankbazaar.com, an online marketplace for interest rate quotes on loans and credit cards, said, “October is the largest month for financial services and we see a big increase in visits to our website. People buy the most during this festival period and banks encourage this by waivers of processing fees and reducing interest rates.”
We should expect at least about 25 percent jump in the interest from customers. This October, we are expecting 20 million visits to our website as against typically an average around 17 million in the past months, he added.
Bankbazaar has tied up with 75 financial partners and 12 products including personal loans, credit cards, mutual funds and insurance policies.
As Flipkarts and Amazons of India offer heavy discounts, fintech players such as PhonePe and LendingKart.com are also witnessing a surge in their business.
Experts suggest that speedy approvals in personal loans, cashback offers and discounts in credit cards are the most sought after factors by customers.
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