Now It Pays Not To Visit Your Bank

If you want to be in good books of your bank, don't ever visit its branch. That seems to be the credo gaining currency on Finance Street in these online times.

Citibank started the trend by imposing a penalty for every branch visit by its Suvidha customers. ABN Amro Bank now joins this bandwagon.

However, rather than penalise, ABN is trying to incentivise discouragement. It is starting a rewards points scheme, called 'Royalties', to its account holders for using the non-branch banking channels.

At present, the point system is available for only those customers who use credit and debit cards and is not available for account holders. The bank has also launched an international debit card along with MasterCard International -- ABN Amro Maestro International Debit Card.

 

ABN Amro Bank India's executive vice president and country representative Romesh Sobti said: "A few competitors disincentivised the customers from coming into the branches. Instead of that, everytime a customer uses a non-branch channel they will now be rewarded by us. Each time any of the channels like ATMs, phone banking, internet banking etc are used the customer will earn points which can be encashed."

The bank has introduced the rewards programme for two major reasons --distribution and costs. The bank has a network of 12 branches in nine cities. "It is a combination of distribution and costs. The costs in banking through the non-branch channels are less and the bank can therefore give it back to the customer as rewards," added Sobti.

According to the bank's head of consumer banking, Nitin Chopra, the bank will reward its customer for transactions through the electronic channels.

The customer will get points if they transfer funds through ATMs, Net banking or bank-by-phone, withdraw cash from ATMs, pay bills through any of the electronic channels, deposit cash at ATMs etc. This is similar to the points accumulated through credit cards.

The bank is targeting a 25-30 per cent growth in its retail customer base and will launch home loans by end of this year. It has a retail customer base of more than 3.5 lakh customers. The bank has seen a growth of 45 per cent on its retail customer base this year.

Sobti said that mortgage products have received a boost because of the reduction in risk weightage for housing loans to 50 per cent. Also legislative changes of foreclosure have also helped the sector.