Jana Small Finance Bank Introduces Competitive Short-Term Deposit Scheme at 6.75%
Jana Small Finance Bank has launched an attractive new deposit scheme, offering an interest rate of 6.75% for tenures ranging from seven to 180 days. This rate is available for retail deposits starting at Rs 10 lakh, and extends to bulk deposits from Rs 3 crore to Rs 200 crore.
The scheme is designed with flexibility in mind, featuring same-day redemption (T+0), the option for partial withdrawals, and an instant overdraft facility. Notably, customers will not incur any charges for early redemption or partial withdrawals, a significant advantage over liquid mutual funds, which typically operate on a T+1 settlement basis.
Ajay Kanwal, Managing Director and CEO of Jana SFB, emphasized the product's appeal, stating, "This offering not only provides better returns but also grants customers the flexibility they desire. If a customer opts not to utilize partial withdrawals, we will extend an overdraft facility."
This initiative comes as banks compete aggressively for deposits in light of robust loan growth. Analysts suggest that rising returns in equity markets have led many investors to favor stocks and mutual funds over traditional bank deposits.
Despite introducing higher interest rates, Kanwal reassured that the bank's overall cost of funds would remain stable. Most of Jana SFB's deposits are of over one-year maturity, with a cost of funds of 8% reported in the first quarter of the current financial year.
Kanwal explained, "We don't have a significant short-term deposit base; about 98% of our deposits are for one year or longer. However, in response to the growing demand for short-term financing solutions, we have initiated vendor financing and supply chain initiatives that align perfectly with these new short-term deposit options.
