IDBI Bank scraps charges on Casa

In an effort to increase the share of low-cost deposits in the total resource base, IDBI Bank has waived charges on current account savings account (Casa) services like draft issuances.

The Mumbai-based public sector bank will also not slap any penalty on customers for failing to keep the minimum balance in their accounts.

“It will bear charges for IDBI customers for using other banks’ ATMs, without any ceiling on the number of transactions. We are the first bank to take such a bold step,” Chairman and Managing Director R M Malla said on Wednesday.

The share of Casa in total deposits was just 13 per cent in June 2010. Malla did not spell out the target for Casa.

Another official said the bank aimed to grow Casa deposits to 20 per cent by March 2011. IDBI Bank is one of the four public sector banks whose Casa ratio is less than 25 per cent.

The government has asked these banks to increase their Casa ratio to more than 30 per cent as this has a direct bearing on their profitability and net interest margins.