If you think that banks are only into the customer acquisition game, think again. Some of the new private sector banks are weeding out accounts (read: closing accounts) as fast as they are acquiring new accounts.
ICICI Bank has identified around five lakh accounts that can be weeded out. For UTI Bank, the figure is around 1-1.5 lakh.
HDFC Bank has already closed around two lakh accounts between January and March, 2003. Each of these open around one-two lakh accounts per month.
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The most common reason for banks asking their customers to move out is the lower-than-minimum balances kept in the accounts. Most of these banks stipulate a minimum balance of around Rs 5,000 per quarter.
Another reason is too many transactions in some of the savings bank accounts, making it a virtual current account. Those accounts which have a large number of cheque returns too are put under the scanner.
The closure of these accounts are over and above the normal accretion of accounts experienced by these banks.
HDFC Bank opens around 1.3 lakh accounts per month and has a customer base of around 3.3 million. ICICI Bank has a base of around 4.7 million accounts with around 2-2.5 lakh accounts being opened every month.