Union Bank plans to expand retail deposit base

Union Bank of India has chartered out a two-pronged strategy of reviving dormant savings bank accounts and adding more GenNext customers through tech-based product offerings to broad base its retail deposit base in the current fiscal.

Typically, dormant SB accounts constitute about 10-15 per cent of the total SB accounts base of banks. The public sector bank wants to renew its relationship with these accountholders.

Dormant accounts are those accounts in which there are no operations (that is, no credit or debit other than crediting of periodic interest or debiting of service charges) for the past few years.

“Even as we continue our focus on attracting new customers, especially the younger lot, into our fold, we also want our field force to re-establish relationship with dormant savings bank accountholders,” said Mr S. S. Mundra, Executive Director, Union Bank of India.

To mobilise more retail deposits, the bank will lay emphasis on reducing dependence on bulk deposits and grow the retail franchise — both for CASA (current account and savings bank account) and term deposits. “Since we have good capabilities in term of technology platform and marketing infrastructure, it is quite doable,” Mr Mundra said.

Business with Govt

Government business is another area that Union Bank wants to further grow. It already has a sizeable chunk of government employees as accountholders, which is a captive customer base to tap into.

While the relationship with the government/government undertaking employees is mainly in the form of salary accounts, the plan is cross-sell retail loan products, such as housing, auto, education, personal and consumer loans and services like remittances. Therefore, the focus this year is to step up package offering and capture business.

“In the last few years we have started offering customised solutions. We go to an organisation or department, discuss their requirements and create a solution that is tailor made, rather than offering them an off-the-shelf product,” Mr Mundra explained.

About 65,000 teachers of Kendra Vidyalayas are accountholders of Union Bank. Soon, 26,000 teachers of Navodaya schools too will join the bank's fold. This is in addition to the over one lakh employees of BSNL who are already the bank's customers.

The government business on the liabilities side is about Rs 40,000-50,000 crore and offers fee income by way of transaction and remittance business. For attracting younger customers, the bank is banking on its information technology platform.

Banking on IT

“We have been able to successfully migrate significant number of customer transactions to alternative channels such as ATM, Internet and mobile banking. Customer transactions on alternative channels have increased from 6 per cent three years ago to 50 per cent as of now. We want to build on this,” said Mr Mundra.

The bank is seeking to leverage products such as ‘cashless campus', which the bank structured for a technological university in Bhopal, to attract the younger customers.

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