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Newest commercial bank Bandhan Bank Ltd garnered a record Rs.80 crore in deposits by opening 60,000 new accounts on its first day. Yes Bank Ltd and Kotak Mahindra Bank Ltd were the last to enter the banking space in 2004.
Bandhan Bank MD and CEO Chandra Shekhar Ghosh during the launch of the new bank in Kolkata on Sunday.
The bank offers 4.25% per annum on savings account for deposits below Rs1 lakh and 5% for deposits above Rs1 lakh
Here is what you need to know if you want to open an account with the bank or make other transactions.
Savings account: Bandhan Bank offers 4.25% per annum on savings account for deposits below Rs.1 lakh and 5% for deposits above Rs.1 lakh. As of now, major state-run and private sector banks offer 4% per annum on savings account deposit.
Some banks, including Yes Bank Ltd, Kotak Mahindra Bank Ltd and IndusInd Bank Ltd, offer 5-7% per annum on savings deposit, depending on the amount.
Currently, Bandhan Bank offers seven types of savings account including an account for the differently-abled. Unlike major private and state-run banks, there is no charge for non-maintenance of a minimum average balance.
Fixed deposits: The bank is offering 8.50% per annum on fixed deposits (FDs) that mature in one to less than three years. Senior citizens will get an additional interest of 50 basis points (bps). One bps is one-hundredth of a percentage point.
In the past six months, major banks have cut interest rates on FDs. In fact, the fall in bank FD rates has been such that they now offer lower interest than small savings schemes such as Post Office Monthly Income Scheme and National Savings Certificate. For instance, State Bank of India is offering 7.75% per annum on FDs for 5 years and above. In comparison, the 5-year National Savings Certificate offers 8.50% per annum.
Base rate: Bandhan Bank has set its base rate at 12% per annum. Base rate is the minimum rate at which banks can lend to its customers. Currently, the base rate of major commercial banks has slid below 10%.
Loans: Right now, the bank is offering home loans, loans against property, two-wheeler loans and overdrafts against term deposits.
The interest rate on the home loan and loan against property are linked to the base rate. There will also be a processing fee of 1% or a minimum of Rs5,000 on the loan amount plus service tax, whichever is higher. Service tax is 14% of the processing fee amount.
In case of two-wheeler loans, you will have to pay 3% of the loan amount as processing charge.
Branches: The bank so far has 501 operational branches, most of them in rural or unbanked areas. Some of the branches will remain open all seven days a week. Bandhan Bank will also focus on doorstep banking, under which it will reach out to customers instead of the customers visiting the branch.
Automated teller machine: As on Monday morning, the bank has about 50 operational ATMs. Customers with a premium or special savings account will get unlimited free transaction access to Bandhan Bank’s ATM as well at ATMs of other banks.
Cards: The bank is currently offering five variants of debit cards on Rupay platform and plans to offer Visa-enabled debit cards soon. The next would be prepaid cards, followed by credit cards.
Mobile app: The bank has done a soft launch of its mobile app for its select customers. We will have to wait and watch for the features of the app.
Locker: You can even avail the locker facility at a minimum cost of Rs.1,000, compared with the minimum charge of Rs.3,000 in some large commercial banks.
Third-party products: Currently, the bank doesn’t offer products third-party products such as insurance and mutual funds.
