Mumbai: ICICI Bank chairperson Chanda Kochhar today said that the bank has tie-ups with Vodafone and FINO PayTech. Both the companies received an “in-principle” approval from the Reserve Bank of India to set up payments banks.
Payments banks will provide its customers with small savings accounts, allowing them to deposit up to Rs 1 lakh. However, these banks will not be allowed to engage in lending activities.
Chanda Kochhar said that ICICI Bank is yet to decide who it will partner with for the payments bank.
Payments banks to strengthen financial ecosystem: Kochhar
With RBI announcing 11 licences for payments banks, top private sector lender ICICI Bank today said the entry of these new entities would strengthen the overall financial ecosystem and also benefit existing banks.
ICICI Bank has investments in two of the 11 entities that have got in-principle approval for setting up payments banks.
“We have tie-ups in two of the payment banks announced. We will watch the progress in both and will continue to move forward,” ICICI Bank’s CEO and Managing Director Chanda Kochhar said here.
She was replying to a query on of the two who it will formally tie-up with for payments bank.
Kochhar said the payments bank will play a complimentary role in the banking system and the universal banks like ICICI Bank stand to gain from their entry.
“The entry of new players will enhance the financial ecosystem and will also make existing banks technology savvy and get them to come out with new products,” she said.
She said all the services which would be undertaken by the payments bank are already done by the universal banks and added that ICICI Bank also has a dedicated digital channel called Pockets, which has had one million downloads.
Kochhar said ICICI Bank is witnessing a pick-up from the retail segment including both mortgage and auto loans, and added that heavy commercial vehicles are also reporting loan demand.
On transmission of RBI’s policy rate cuts into lending rates, Kochhar said there can never be an equal cut at the bank’s end and added that it has passed the benefit with the revision of 0.30 per cent.
Stating that only 60% of a bank’s deposit base is from term deposits, which get repriced with deposit rate cuts.
“A 75 basis points cut translates into 40-45 basis points cut in Cost of Funds for banks. You have already seen a 30 basis points cut.
Transmission will never be a one is to one correlation with monetary policy rates,” she said.
On the future trajectory of deposit rates, she said the small savings rates have a bearing on it and banks cannot get it down faster.
Chanda Kochhar says ICICI Bank has tie-ups with Vodafone and FINO PayTech, will decide with whom to partner for payments bank
PTI