Kotak Mahindra bullish on Punjab,offers 6% on savings

Kotak Mahindra Bank finds Punjab an attractive state and offered six per cent interest to saving account customers and indirect higher returns via savings made through value added services.

KVS Manian,President Consumer Banking,Kotak Mahindra Bank who was here told reporters today that household savings is at its lowest in 22 years on account of slow income growth and rising inflation. This combined with the tepid sentiment arising from global economic uncertainty has resulted customers seeking savings options that are not only secure and guaranteed,but,also offer superior returns to beat the sluggish trend. He said that 6% proposition builds on this key customer insight which in turn was made possible by Reserve Banks move to deregulate Savings Banks interest rate.

Manian said that Punjab is a progressive state which was among the first few to achieve financial inclusion and customers in such a state would lap up the scheme offering six per cent interest on saving bank accounts. Mahesh Balasubramanian,Executive Vice President and Co-Head Branch Banking,Kotak Mahindra Bank said,our offer of 6% per annum interest rates on savings bank balances of over Rs. 1 lakh represent approximately 50% incremental in interest income in an SB account compared to industry average of like ticket sizes,and offers a smart alternative to customers. This combined with host of other smart value added services introduced on the basis of customer preferences and trends will result in further savings adding to the overall savings kitty of SB account holders.

Story continues below this ad

He said that after the deregulation of savings bank interest rate by the Reserve Bank of India in October 2011,Kotak Mahindra Bank was among the first banks to increase rate of interest on Savings Bank account to a record high of 6% p.a. for SB balances above Rs 1 lakh and 5.5% for SB balances up to Rs 1.

The 6% p.a. interest offering on SB accounts has had a very positive impact as it has enabled customers to match this return with the post-tax yields of term deposits of short to medium tenure. Additionally,interest earned on savings account up to Rs. 10,000 is now tax free. As a result,a whole lot of customers now have a hassle free option to grow their monies without having to lock it in term deposits. SB deposits of Kotak Mahindra Bank increased from Rs. 3,307 crore as on June 30,2011 to Rs. 5,540 crore as on June 30,2012,a year-on-year increase of a whopping 68%.