Syndicate to rejig oldest deposit plan

The Manipal-based Syndicate Bank is launching a reworked version of its nearly 80-year- old "Pigmy Deposit Scheme" to expand its customer base, encouraged by addition of 12 lakh customers in the past two months through a special drive.

The bank will increase the tenure of the deposit scheme to 72 months from 63 months now and allow depositors to convert their savings into higher interest earning fixed deposits after one year.

The bank would launch the new scheme in about 500 branches. C P Swarnkar, chairman and managing director, told Business Standard, "We are in the process of recruiting new agents to collect the pigmy deposits. We will launch the new scheme next month. We are planning to reintroduce the scheme in a big way to encourage the people to inculcate the habit of savings."

The agents appointed for the deposit scheme would also get "attractive" incentives to collect more deposits.

Under the new scheme, the bank would automate deposit collection. It would provide cash collecting machines to all the agents and the condition would be that they have to collect a minimum of Rs 7,500 per month.

The pigmy agents would be paid Rs 750 a month as fixed remuneration and 2 per cent commission on the amount in excess of the minimum. For earning 2 per cent commission, the agents will have to mobilise at least Rs 40,000 per month, Swarnkar said.

If any depositor withdraws from the scheme before completion of the first year, the bank would charge a penalty of 3 per cent on their savings, he said.

Syndicate Bank had launched the deposit scheme way back in 1928 collecting amounts as small as 2 annas daily at the doorsteps of the depositors through its agent network. The bank collects over Rs 1 crore per annum under the scheme.

George Joseph, executive director at the bank, said the bank will appoint at least 2,000 new agents.

The bank is also planning to launch a current account campaign during the second half of the current fiscal with plans to get at least one lakh new accounts. The exact details of the new campaign are still being worked out, Joseph said.

Syndicate Bank has 18 million account holders. The bank registered 11 per cent rise in its net profit at Rs 181 crore for the quarter ended June 30, 2006 as against Rs 163 crore reported during the corresponding period of last fiscal.