India's Kotak Mahindra expects 50% growth in saving bank deposits

Kotak Mahindra Bank expects 50 percent growth on savings bank deposits on the strength of offering high rates of interests.

This was conveyed by the bank's President ( Consumer Banking) KVS Manian.

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 per cent, he said.

The bank offers 6 percent rate of interest on saving bank balances above Rs 1 lakh and 5.5 percent for balances up to Rs 1 lakh.

It also offers value added services like cash back on purchases, home banking, doorstop account opening and just in time payment.

Offering high rate of interest pushed the bank's saving bank deposits up from Rs 3,351 crore in 2010-11 to Rs 5,050 crore in 2011-12.

"The 6 per cent per annum interest offering on saving bank 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," he said.

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