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IDBI Bank has waived all banking charges to attract more customers and increase its CASA deposits. It aims to double its customer base to 10 million in a year. This will reduce fee income but the bank plans to mitigate losses by expanding branches, ATMs, raising funds, and increasing lending. However, there is uncertainty around whether IDBI Bank has sufficient resources to handle the increased workload and business scale-up, and if this move will revolutionize competition in the banking industry.

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Rajeev Ranjan
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2K views

Idbi

IDBI Bank has waived all banking charges to attract more customers and increase its CASA deposits. It aims to double its customer base to 10 million in a year. This will reduce fee income but the bank plans to mitigate losses by expanding branches, ATMs, raising funds, and increasing lending. However, there is uncertainty around whether IDBI Bank has sufficient resources to handle the increased workload and business scale-up, and if this move will revolutionize competition in the banking industry.

Uploaded by

Rajeev Ranjan
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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IDBI BANK

banking without banking charges


Waives off all Bank Charges
 List of charges that have been removed:

Average Balance Charges


Account Closure Charges
ATM Inter Change Fee
Eft Charges
New Card Issue
Outstation Cheque Collection
Cont.

Cardfee New - Master


Cardfee New - VISA
Cash Services Charges
Cheque Book Charges
DD Charges
ECS Charges
Cont.
PO Charges
Account Statement Charges
Standing Instructions Charges
Stop Payment Charges
Outward Charges
Micr Cheque Charges
DD Cancellation Charges
DD Issue Charges
Causes of Changes in Policy
To Strengthen the Bank's bond with its
customers
 To grow low-cost deposits, retain
customers and attract new ones.
To help boost its low-cost CASA deposit
base to around 20 per cent of the total
deposits in the next six months, from the
current levels of 13%.
Pressure from RBI to increase their
CASA Deposits to industry average
levels.
How does it affect the Customers
Any account holder, who walks into the
bank and asks for a demand draft, will get
it without a charge.
 Any account holder can do an Electronic
Fund Transfer, without a charge.
 No account holder will have to worry
about keeping a minimum balance in his
or her account. 
Cont..
An account holder will be able to withdraw
money from ATM as many times as he may
want to without paying a charge.
All the charges levied by a bank except
those pertaining to bounced cheques have
been waived.
How does it Impact the Bank
Bank expects to increase its share of current and
savings account (CASA) deposits to 22% by the
end of this fiscal from current levels of 13% as
against industry average of 30%
Bank is aiming to double its client base to 10
million (one crore) customers in the next 12 months
from existing 5 mn.
Bank will lose revenue as the income from as Fee
Income would be come down.
Tremendous increase of workload on the
Workforce as the business will grow in folds.
How will the Bank Mitigate its
losses
The Management says that they would
rather earn fees on the assets side of the
balance sheet by syndicating a Rs 5,000-
crore loan and earn Rs 50 crore fees than
go after small charges on the liabilities side.
Before March next year they plan to add
280 more branches in urban, semi-urban
and rural India covering all states and union
territories.
Cont..
IDBI bank has embarked on a massive expansion-
cum-diversification programme during this year
They Plan to increase the number of ATMs by
adding around 400 to 500 new ones and take the
total figure to 1,300 ATM kiosks.
In next three years, the bank is planning to open
1,500-2,000 branches which would triple their
existing base.
IDBI Bank has decided to raise at least one billion
USD during the next 12 to 15 months
Cont..
 The Bank has recently received capital
injection of Rs 3,011 crore from the
Government.
Since Large corporate, mid-corporate and
SMEs know them quite well, they would not
find it very difficult to lend the money to
them
IDBI wants itself to be known as a universal
bank that caters to the financial needs of the
common man.
Questions which remains open
Will it REVOLUTIONAIZE the entire
banking industry?
Will IDBI Bank be able to cope up with
the increased work pressure?
Do they have the sufficient resources to
stand tall against such a huge scale up in
their business?
How far will it impact its Top and Bottom
Line of IDBI Bank?
Cont..
Will the Banking Industry become a lot more
competitive and will it result in a similar
situation as to Telecom Sector?
What is the preparation level of Peers in the
Industry?
Which kind of Banks will be the most affected
because of this bold step of IDBI Bank
How will it impact the plans of upcoming
Domestic Banks like the Reliance Capital and
LIC Housing Finance and also the Foreign
Banks.

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