Banks need to devise new strategies to attract depositors: Financial services secretary Vivek Joshi
Banks need to devise new strategies to attract depositors, financial services secretary Vivek Joshi said, even as he noted that Indian banks' low-cost deposits, current and savings accounts (CASA), are comfortable at around 41% of their total deposits.
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In a post-budget interview, Joshi also said the plan to privatise two state-run banks and one general insurer is still on and that the government is in consultation over the issue. «Last year, low-cost deposits were at 43%, and prior to that, it was 45% for all scheduled commercial banks (SCBs). But if you look at 2015-16, CASA deposits were at 36%. So, deposits above 40% cannot be considered less,» he said. It is a competitive market, and banks will have to design means to attract more deposits through increased customer efficiency and other measures, Joshi added.
On the issue of giving capital support to state-owned general insurers, he observed that these firms are in a recovery phase, having made a turnaround in the last financial year. While Oriental Insurance has posted marginal profits in the last financial year of around ₹18 crore, National Insurance and United India Insurance have brought down their losses significantly, Joshi said. «They are looking up. So, we will wait for some time (before infusing more capital), as they are making a turnaround. Possibly a year,» he said, noting that the government had put in around ₹17,450 crore between FY20 and FY22 in the three general insurers. Joshi said the plans for changes in foreign direct investment, or FDI, in the sector will be reviewed as per the
