Banks eye small cities to up current, savings accounts
The public sector banks are exploring all options to increase their current account savings account (CASA) deposit numbers. This is at a time when a recent report on the banking sector by Credit Analysis and Research Ltd (CARE) said that CASA deposits of public sector banks showed a marginal dip.
“Banks have since FY2000 seen the wide mismatch with credit growth surpassing deposit growth. However, deposit growth will be greater than or equal to credit growth in the next two years,” the report said.
It also said that incremental current account deposits would be lower in the next two years as sluggish businesses coupled with shortage of funds compelled corporates not to keep idle funds in the banking system.
Public sector banks, which may have seen this possible dip, are now looking at smaller businesses in smaller cities to grow their current account deposit numbers.
Recently, both Corporation Bank and the Union Bank of India unveiled their schemes for putting up point-of-sale (POS) terminals at merchant establishments in Tier II and Tier III cities.
The merchant establishments who pick up these POS terminals would have to open a current account in that
bank to avail of the facilities provided by it.
“We plan to roll out 10,000 machines in the first six to twelve months and we are looking at a turnover of Rs 1-1.5 lakh per month per merchant,” said Asit Pal, executive director, Corporation Bank, while announcing their multi-tier end-to-end POS deployment engagement with Prizm Payments Services Pvt Ltd and MRL POSNET Pvt Ltd.
Union Bank has also announced similar plans. “We plan to acquire 25,000 merchants in the first year and around 1 lakh by the end of the third year of the operation of our merchant acquiring business,” said MV Nair, chairman and managing director, Union Bank of India while unveiling the bank’s merchant acquiring business through POS terminals plan. Financial Technologies would power the POS terminals in their case.