Cash for Casa: Banks reward staff to boost low-cost deposits

To stabilise fund flows by increasing the share of low-cost deposits, banks are giving cash incentives and recognition certificates to employees for opening the highest number of current accounts or savings accounts (Casa).

The incentive is Rs 50-100 per account but there is an overall cap on how much an employee can earn through such schemes. The move also aims to cut dependency on bulk deposits.

"Under the permissible incentive schemes, where we are allowed to distribute up to one per cent of the profit, we give incentives to our branch staff to get more low-cost deposits," said M V Tanksale, chairman and managing director, Central Bank of India. He said there were schemes for both branches and individuals.

At Central Bank, incentives are given on the number of accounts opened, their quality and the average balance maintained in these. In the first quarter of 2012-13, the bank's savings accounts grew 12.7 per cent as compared to the corresponding period last year.

The overall trend of deposit growth has been worrisome for bankers this year. According to the Reserve Bank of India, deposits grew 13.8 per cent over a year as on July 27. RBI’s projection was 16 per cent growth for the current financial year.

Dena Bank aims to maintain its Casa ratio at 35 per cent for the year. It has introduced an incentive scheme for the purpose. "We have asked our branch staff to go for mobilisation of Casa. Every week, we select employees from each branch, based on their performance, and reward them with some kind of recognition or certificate," said Ashok Dutt, executive director.

Union Bank of India is running a campaign for current accounts. Employees are not only being rewarded to open more accounts but also to revive inactive accounts. Its Casa ratio (of the total) was 30.95 per cent at the end of the June quarter. "We aim to stretch the Casa share in total deposits to 33 per cent by the end of this year," said S Govindan, general manager, personal banking and operations. He said they’d start a similar campaign to boost savings accounts in the fourth quarter this year.

Punjab National Bank, too, is offering rewards to motivate employees for Casa campaigns.