The measure will come into effect from the second quarter in FY 2021-22.
In one of the first in the industry, IFDC First Bank will credit interest to customers’ savings accounts on a monthly basis as opposed to the quarterly-basis credit. The measure will come into effect from the second quarter in FY 2021-22. The bank will automatically activate the monthly credit facility for all savings account customers by default.
Further, it is believed that the interest on savings balances will be credited by the bank on the first of every month with interest rates following suit with the existing interest rate slabs on the website. The facility can be availed on all types of savings accounts. The bank assures that there are no changes to the average minimum balance and the move will not be followed by any changes in services. The interest rates will continue to be calculated on daily balances as per RBI mandate and the cumulative interest thus earned will be credited to the savings account on a monthly basis.
The facility comes at the time when Household Financial Savings are expected to be high with as the pandemic restricted movement. With states now unlocked and a business resuming as earlier, the effect a possible third wave might have on savings are yet to be observed.
Speaking to Business Standard, MD and CEO of IDFC First Bank, V Vaidyanathan, expects disbursals to pick up every quarter if no lockdowns persist in the future. He added that the company expects to grow at 25 per cent on the retail side and 20 per cent on the bankside in FY 22. In Q1, the bank reported a net loss of Rs 630 crores owing to a rise in provisions.