Summary :
Public sector banks have embarked on an aggressive move to open new accounts in a bid to boost deposits. Official sources said about 25 million new accounts have been opened by these banks in the last few months. Most banks have added at least 1-1.5 million new accounts in the last few months.
PSBs open new a/cs to boost deposits
MAHUA VENKATESH
Posted online: Wednesday, January 03, 2007 at 0119 hours IST
NEW DELHI, JAN 2: Public sector banks have embarked on an aggressive move to open new accounts in a bid to boost deposits. Official sources said about 25 million new accounts have been opened by these banks in the last few months.
Finance minister P Chidambaram, in his review meetings with the chief executives of the state-owned banks, had underlined the need to boost deposits to keep pace with the unprecedented credit growth which is at over 30%. Deposits have grown at less than 20%.
Most banks including Punjab National Bank (PNB), Bank of Baroda (BoB), United Bank of India (UBI) and Syndicate Bank have added at least 1-1.5 million new accounts in the last few months.
SC Gupta, chairman and managing director, PNB said the banks were trying to devise their own formula and product to boost deposits.
“Our bank is also aggressively looking at various innovative products with a view to push deposit growth,” he said, adding deposit growth has to keep pace with the credit growth. PNB opened about 12 lakh new accounts in the last six months.
PK Gupta, CMD, United Bank of India, said 1.3 million new accounts have been opened since September 2005. About 7 lakh accounts have been opened so far in this fiscal, he said. The bank has also opened three lakh no frills accounts in the last few months. “We would have steeper targets for the next fiscal,” Gupta said.
Meanwhile, bankers have also urged the finance ministry to increase the ceiling for tax deducted at source (TDS) on income earned from fixed deposits to Rs 10,000 from the current Rs 5000. It may be noted that earlier the ministry had indicated that it would take necessary steps required to boost deposits.
In addition, a proposal has been made to allow a deduction on investments up to Rs 1 lakh in bank deposits with a tenure of three years. At present, individuals investing only in fixed deposits with a tenure of five years and more are eligible for tax benefits under 80C of the Income Tax Act.
