Software major withdraws all its deposits from the country’s largest bank.
The banker to every Indian appears to have fallen out of favour with the country’s second largest software exporter. Infosys has withdrawn all its deposits with State Bank of India (SBI), the largest commercial bank in the country, in the just concluded October-December quarter.
The outsourcer’s deposit balance with SBI was nil as of December 31, 2011 compared with Rs 386 crore nine months back. Infosys had Rs 457 crore in deposits with the state-run lender as of September-end.
Meanwhile, in the first nine months of this financial year, Infosys’ deposits with top private sector lenders like ICICI Bank and HDFC Bank nearly doubled.
| INFOSYS’ DEPOSITS | |||
| 31 Mar ‘11 | 30 Sep ‘11 | 31 Dec ‘11 | |
| State Bank of India | 386 | 457 | Nil |
| ICICI Bank | 689 | 1,663 | 1,500 |
| Punjab National Bank | 1,493 | 1,552 | 1,500 |
| Bank of Baroda | 1,100 | 1,500 | 1,500 |
| HDFC Bank | 646 | 995 | 1,357 |
| Canara Bank | 1,225 | 1,309 | 1,241 |
| Total deposits | 12,932 | 16,169 | 15,562 |
| All figures in Rs crore Source: Company | |||
Infosys began the financial year with Rs 689 crore deposits in ICICI Bank. The software firm had Rs 1,500 crore deposits with ICICI Bank at the end of the last calendar year, marginally lower than the Rs 1,663 crore it had as of September 30, 2011.
At HDFC Bank, the technology company’s deposit balance increased to Rs 1,357 crore from Rs 646 crore in the first three quarters of this financial year. It may be recalled that during the global financial crisis of 2008-09, Infosys withdrew most of its deposits with ICICI Bank and parked the money with public sector banks, including SBI.
K V Kamath is currently non-executive chairman at both ICICI Bank and Infosys.
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Infosys, however, maintained that its choice of banks for keeping deposits depended on the rate of interest offered by the lenders.
“The move from SBI to other banks is purely based on the yield we get. The yields from other banks were higher and hence we preferred them,” said V Balakrishnan, member of the board and chief financial officer of Infosys.
SBI currently offers a maximum of nine per cent interest on deposits of Rs 1 crore and above. It revised its interest rates on these deposits early November. ICICI Bank does not disclose its interest rates on domestic term deposits of Rs 1 crore and above publicly.
ICICI Bank along with Punjab National Bank and Bank of Baroda had the highest share in Infosys’ deposits. The software firm’s deposit base narrowed 3.75 per cent sequentially in October-December to Rs 15,562 crore. Infosys’ deposits, however, grew 20 per cent in the first nine months of this financial year. It has parked its deposits in 27 banks.