Small finance banks on deposit mobilisation spree on 1st year of operation

SFBs offering up to 100-150 basis points higher interest rate on term deposits over market rates

With eight out of ten small finance banks now fully operational, aggressive deposit mobilisation in the first year of operation has turned out to be the key strategy for almost all the new entities. In addition, the new age banks are betting big on technology to reduce the cost of operations.

All the operational small finance banks are offering up to 100-150 basis points higher interest rate on term deposits over market rates. This apart, some of the banks are also eyeing bulk or corporate deposits. The idea behind the move is to replace high-cost loans taken by small finance