Banks to start convenient banking for customers this month

Starting this month (September), you could probably go to your branch at 8 in the morning before you leave for office. Or you may be able to go to a bank branch after the office hours. Banks will soon be allowed to remain open anytime during the day for convenient banking. Banks in a local area can decide at the state level bankers committee (SLBC) when to keep the banks open depending on the convenience of the customers. Public sector banks will also introduce PSB loans in 59 minutes for auto loans and personal loans and Kisan credit cards will have to be issued in 15 days once the application is submitted for faster flow of bank loans at the customers' convenience.

The Department of financial services had told banks to have convenient banking hours which will take into consideration the customer's availability, especially, in the rural areas where the day banking hours are not convenient as they all leave in the mornings to work in the fields and return only in the evening. The Indian Banks Association (IBA), the apex body where all banks are members, have told the lenders to arrive at a convenient timing after discussing at the SLBC.

A senior banking official said, "We have to decide the timings in consultation with the banks in our locality at the SBLC. So our branches in rural areas may remain open in the evenings, and in urban areas, it may open as early as 8 and shut for a few hours and open again in the evening."

The current month will also see all the public sector banks offering Reserve Bank of India's repo linked loan and deposit products. The home loan products from these banks will range from 8.05 to 8.5%. State Bank of India, Union Bank of India, Central bank of India, Bank of India, Bank of Baroda and Punjab National Bank will offer repo linked home, auto and personal loan products from this month. SBI has announced a 20 basis point cut in its lending rate while Union Bank has reduced its lending rate by 15 bps. One year benchmark rate for SBI is at 8.25% while that of Union Bank of India will be at 8.35%.

The repo rate is at 5.40%, hence the new lending rates and deposit rates will use the repo rate as a benchmark. The interest rate on SBI home loan linked to the repo rate is 8.05%, which is lowest in the market and also lower than the bank's current MCLR linked home loan rate of 8.35%. The bank is charging a base spread of 2.25%, and an additional spread of 30 bps over the current repo rate is 5.40%, which translates into a home loan rate of 8.05%.

Federal bank is the first private sector bank to begin linking its deposit rates to the repo rate. The savings deposits of Federal Bank with a balance less than Rs 2 lakh will earn an interest consistent with the repo rate (external benchmark rate) announced by the RBI at regular intervals. At the prevailing repo rate, balances up to Rs 1 lakh in savings bank accounts will earn an annual interest of 3.50%. The savings deposit balance above Rs 1 lakh and less than Rs 2 lakh will be paid an interest of 3.25% per year.

RBI has also asked all mobile wallets such as Paytm, PhonePay to complete Know Your Customer (KYC) exercise by August 31, failing which they may not be allowed to use it from this month.