Power distributor BSES has discovered a new source of earning revenue to help run its business.
The discom has come up with a proposal to take a lumpsum amount of money from its consumers and keep that in fixed deposits. They plan to pay the consumers an annual interest rate that is 1% higher than what banks offer to the public on term deposits.
As per the scheme, 2.8 million Delhiites, who are BSES customers, can choose to deposit any amount — even as low as Rs 5,000 — for a minimum period of one year and earn interest. At the end of the term, they will get their money back.
“If you calculate your electricity bill for the next three years based on your monthly average bill, and then choose to lock in that money with us, then the interest that you earn from us can alone take care of your monthly bills. So electricity becomes free for you,” said Ramesh Narayanan, chief executive officer of BSES Yamuna Power Limited.
“We have proposed this scheme as an additional source of revenue subject to regulatory approval.”
The reason behind the scheme is simple. Discoms raise funds by taking loans from banks with repayment interest rates much higher than what BSES is willing to offer.
Banks often charge upwards of 11% interest on the money they lend to discoms. On the other hand, the current rate of fixed deposits banks offer to the public is up to 8.5%. So even if BSES pays its consumers 1% more, the deal still works out to be way cheaper.
According to the discom, even if 10% of its consumer-base avail the offer and each deposit even Rs 10,000 for a year, it will raise a neat Rs 280 crore. For the initial period, it wants to keep the money raised limited to Rs 1000 crore.
West Bengal’s Calcutta Electricity Supply Corporation was the only other discom to introduce a similar scheme.