Bank of Baroda also waives minimum balance charges amid deposits chase
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Mumbai: State-owned Bank of Baroda on Sunday announced waiver of charges to customers for not maintaining minimum balance in their savings accounts . This has come into effect from July 1.With this, the bank joined Canara Bank Punjab National Bank , and Indian Bank in waiving the minimum balance requirement. "With this, customers will not incur any charges for any shortfall in the Monthly Average Balance in their Savings Accounts. The waiver is not applicable on Premium Savings Account schemes," Bank of Baroda said in a statement.Experts suggest the move is likely to be part of lenders' strategy to attract liabilities as deposit growth remains a challenge for the banking industry. "Waiving penal charges on non-maintenance of minimum balance is an indirect message from banks to customers to keep some money with them," said Saurabh Bhalerao Associate Director - BFSI Research, CARE Ratings."Bank deposit is no longer the go-to option for people to save their money. People are now increasingly putting money in other financial products like mutual funds and even direct investment into stocks. With falling rates on deposits, banks may not find it easy to grow their deposit book. Share of CASA (current and savings account) has come down," he added.Canara Bank, which was the first bank to announce waiver of charges, hoped that the move will encourage customers to shift funds into term or recurring deposits in the long term. "Perhaps if we don't do this, we will lose deposits," bank's executive director S K Majumdar told ET last month."This creates a feel good for the customer. At a time when the industry is facing a challenge of mobilising deposits, especially because capital markets are doing well, this gives customers an alternative," he added.
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