When deposits become 'assets' of banks: Innovation needed beyond high rates

Offering a higher interest rate is an easy but costly solution

My neighbour Mr Fernandez has resumed his habit of visiting bank branches. A super senior citizen, he earlier used to visit the branches often. But he stopped as branch staff started hounding him, selling mutual funds and insurance policies.

 

He has kept his money with two banks – a private and a public-sector bank. The “treatment” was the same at both banks.

 

Last month, the relationship manager of one bank dropped by Mr Fernandez’s house. She convinced him to open a fat fixed deposit (FD) with the bank as a large amount in his savings bank account was earning very