The Hindu Business Line : Private banks vie for Global Trust's retail pie

And by the looks of it, one bank's problem can certainly be converted into a business opportunity for other peer banks, especially in a system where all of them are vying for a bigger piece of the retail pie.

However, there seems to be no cause for complaint, as it usually translates into advantages for the customer.

Even as most depositors with Global Trust Bank were left flabbergasted at the Reserve Bank's sudden order of moratorium freezing the bank's operations, some private banks were quietly working out products that could be offered to GTB's customers, many of whom felt like they had been left high and dry.

ICICI Bank package

ICICI Bank has come out with a special offer, which is on the table for GTB customers only. The bank will extend personal loans for up to five times the net take home salary of a customer at the concessional rate of 14 per cent. All the GTB customer has to do is to provide ICICI Bank with their net-credit balance statement with their GTB account for the past three months. Customers will also be given a two-month moratorium for repayment of the loan, by ICICI BankRepayment tenures can range from one year to over three years.

"We have made it genuinely easy for the borrowers. Of course this will be a limited period scheme to meet the temporary cash needs of GTB customers. Usually, we charge around 18 per cent interest on personal loans, so we are offering these customers a special rate," said Mr V. Vaidyanathan, Senior General Manager, retail banking, ICICI Bank.

Centurion schemes

Centurion Bank has also announced two special schemes for the account holders of GTB. GTB account holders can now avail themselves a pre-approved personal loan scheme for up to five times their net monthly take-home salary and also get 50 per cent off on the annual maintenance charges of demat accounts, for the first year on opening an account with it. Mr Anil Jaggia, Chief Operating Officer, Centurion Bank, explained that the personal loan will be akin to an overdraft for the first three months since no equated monthly instalments are to be paid. At the end of three months, the customer can either choose to pre-pay the entire amount or convert it to a personal loan. The interest rate applicable for the first three months would be 12 per cent, thereafter interest would be charged at the prevailing rate for unsecured personal loans.

Some bankers confided that while they were considering similar products specifically aimed at GTB customers, they are currently undecided, with the Finance Minister's latest announcement, that the withdrawal limit on GTB accounts may be relaxed further.

In all this, while the customer is undoubtedly the king, they may do well to remember what American author and humourist Mark Twain said of bankers. "A banker is a fellow who lends his umbrella when the sun is shining and wants it back the minute it begins to rain."