No decision on savings account rate hike: City Union Bank
November 5th, 2011 - 6:36 pm ICT by IANSChennai, Nov 5 (IANS) Private sector City Union Bank has decided to play a wait-and- watch game in respect of revising its interest rates on savings bank accounts, an official said Saturday.
“We are waiting for the big banks to decide their rate of interest on savings bank accounts so that we can tailor our offering. Till now, different banks have taken a call to offer interest between 3.5 percent and 6 percent,” the bank’s managing director and CEO N. Kamakodi told reporters here.
He said at an average, the rate increase is expected to be between 1.5 and 2 percent.
The Reserve Bank of India (RBI) recently deregulated the interest on savings accounts, allowing the banks the freedom to offer their own rates subject to two conditions — that for accounts with a credit balances of less than Rs.100,000, a uniform rate has to be offered, while for accounts with more balance, a tiered interest rate structure could be offered.
Kamakodi said that out of the bank’s total deposits of Rs.14,722 crore, the savings account comprised 10-12 percent and the current account around 8 percent. The balance is contributed by term deposits.
According to him, the bank is focusing on tier-two cities for expanding its branch network as such a move does not need RBI’s licence.
“By the end of this fiscal, we will have 325 branches, 650 automatic teller machines (ATMs) and 1,000 point of sale terminals. The total number of branches till date is 284 and the number of ATMs is 351,” Kamakodi said.
The bank closed the second quarter of the current fiscal with a total income of Rs.460.24 crore and a net profit of Rs.77.52 crore, up from Rs.292.14 crore and Rs.61.59 crore logged during the corresponding period of previous fiscal.
Speaking about non-performing assets (NPA), Kamakodi said the gross NPA for the period under review went down to 1.18 percent from 1.26 percent and the net NPA came down to 0.42 percent from 0.54 percent.
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