Page 9 - Banking Finance MAY 2017

BANK UPDATE

Net banking user of asso- Kotak Bank hopes to double customer base with '811'
ciate bank need not reg- facility
ister again for Online SBI Kotak Mahindra Bank expects to double its customer base to 16 million within
the next 18 months on the back of its newly-launched
A customer and net banking user of '811' digital banking ecosystem. Further, with more cus-
an associ- tomers taking to digital banking, the private sector
ate bank bank's future branch expansion will be more measured.
need not
register According to the bank, '811' is a mobile banking app,
afresh for which allows paper-less, real-time account opening, with
availing the net banking services of over 100 features for banking, payments and shopping. It offers a zero balance
savings account with zero charges for all digital transactions and customers can
State Bank of India (SBI) with which
it has merged. earn up to 6 per cent interest on their savings bank accounts.
The customer can log in with the The customer acquisition cost, according to bank officials, is 80-90 per cent lower
than the traditional channel. "Our view is customer ownership is important, the
same username and login password
into OnlineSBI. The website address size of physical infrastructure has to follow that objective. And with '811', we
of the associate bank after merger believe we can serve a lot more customers with relatively less branches than
will be https://www.onlinesbi.com. what we needed earlier," said Uday Kotak, Executive Vice-Chairman and Man-
aging Director.
Accounts having Rs 20k
balance can avail credit Payment Banks generous with deposit rates
card in SBI The Indian consumer is the currently heading the banking industry, which is least
likely to favour individuals when borrowing isn't cheap,
State Bank of India has said that it will and savings rates trail headline inflation. But competi-
offer credit tion has made new banks generous with deposit rates,
cards to ev- although the durability of these offerings is in doubt.
ery account
holder who New payment banks (PBs) and small-finance banks (SFBs)
has a bal- are offering savings interest rates as high as 7.25%, more
ance of Rs 20,000-25,000, without than 300 basis points higher than what universal banks usually offer - 4%.
going into credit history. Industry experts like the initial offers to appetizers, saying rates will fall as the
market evolves. "Savings accounts are meant for transactions, and our belief is
This is the first major joint collabora-
tion between SBI and SBI Card after that people are not rate sensitive regarding such accounts. Attractive offers can
the bank hiked its stake in the joint give a temporary bump, but will not be economically viable for the entity in the
venture to 74% by buying out part of long run," said Samit Ghosh, chief executive officer, Ujjivan Small Finance Bank.
its partner GE Capital's stake for Rs Most experts say the retail focus of the payments business meant that customer
1,168 crore. acquisition for these banks was bound to be as expensive as it is for the e-com-
merce business. The bigger question here is if customers can be made to stick
In an attempt to encourage adoption of
credit cards and facilitate expansion in around once teaser rates are withdrawn.
the reach of digital payments, SBI Card Syndicate Bank opens 40 'Ananya' branches digitally
"Unnati" will be offered free, at zero
annual fee, for four years. "Presently, Syndicate Bank has digitally launched 40 'Ananya' transformed branches. "Project
lack of credit history has been a chal- Ananya is a two-year large-scale transformation project undertaken by the bank to
lenge in increasing the card penetration provide customers with 'best in class' services while improving and modernising the
in the country. In such a scenario, this whole bank," said Arun Shrivastava, Managing Director and CEO, Syndicate Bank.
card is likely to facilitate in generation "These 40 branches are a part of the 372 Phase 1 Ananya transformed branches
of credit history for new users, which will that aim to enhance customer experience, improve sales focus, and improve
help bringing them into organised finan- digital transactions through a dedicated digizone," he added. The bank also
cial stream," said Bhattacharya. launched its first micro, small and medium enterprise (MSME) hub in Bengaluru.

BANKING FINANCE | MAY | 2017 | 9

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