Private banks all smiles | india | Hindustan Times
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Private banks all smiles

THE PRIVATE sector banks in the city are gearing up to receive a flood of new deposits in the coming days. And this would be without taking up fresh deposit mobilization drives. Reason: possible shifting of a major share of deposits by the SBI customers to private banks.

india Updated: Apr 06, 2006 00:16 IST

THE PRIVATE sector banks in the city are gearing up to receive a flood of new deposits in the coming days. And this would be without taking up fresh deposit mobilization drives. Reason: possible shifting of a major share of deposits by the SBI customers to private banks.

The two largest players in the retail banking space mainly the HDFC Bank and ICICI Bank in the city already have a huge portfolio of customers also maintaining savings and current account balances with the State Bank of India (SBI) branches where the indefinite strike by employees have crippled banking transactions  at every level.

While, the SBI top management negated the fact that a large chunk of the bank’s deposit base could move to private banks as soon as the  strike gets called off by the employee unions, the alert has already been sounded at least among other public sector banks having strong employee unions in the Lucknow circle.

“The shifting of a major share of deposits by the SBI customers to private banks is certain in the current circumstances. We have no plans to poach upon SBI customers by starting any special deposit mobilisation drive to take advantage of the situation. That would be totally unethical,” Govind Pandey, Head, HDFC Bank (UP, Uttaranchal & parts of Haryana) told HT Lucknow Live.

However, the message is very clear— about 70 per cent of the banking business in the city is in the hands of public sector banks, out of which the SBI has a lion’s share of 30 per cent. “If SBI customers decided to move their deposits to private banks when the strike got over, that’s good news for all the private banks in the city,” he said..

As far as HDFC Bank was concerned, the 30 per cent of overall banking business remaining with the SBI in Lucknow circle was a very important market segment for us. If  a major share of SBI’s deposit base moved to private banks, it would be a definite plus for HDFC Bank, Pandey said.

The private banks in the city are also gaining immensely from the transaction charges levied for using their ATMs by SBI customers.

“While SBI would compensate for all the charges levied on their customers for use of ATMs of  other banks, the transaction charges are certainly additional revenue for any bank,” Pandey added. 

Similar views were echoed by an ICICI bank official from Mumbai, who said deposits from SBI might move not just in Lucknow circle to private banks but also from the entire SBI branch network in UP.