Payments bank segment: ICICI Bank to adopt wait and watch approach

ICICI Bank, country's largest private bank, will watch the progress before venturing into the payments bank segment. The bank already has a tie-up with payments bank licence winners Fino Paytech and Vodafone m-pesa.

"We'll watch the progress in both and will continue to move forward, we've with Fino and Vodafone.

"The entry of new players will only enhance the financial eco-system and make the existing banks more tech-savvy," said Chanda Kochhar, MD and CEO of ICICI Bank, on the sidelines of an SBI event.

Echoing the RBI Governor's views, Kochhar said payments banks will only be complementary to whatever else the rest of the banking system is doing.

On stalled projects, the ICICI Bank chief said, "We need to clear existing projects....FDI investors look at sectoral solutions. We're looking at plug and play solutions. Those make projects very bankable."

She said the bank's digital product ‘Pockets’, (its mobile app) was already its digital bank and had 1 million downloads already.

Talking about interest rates, Kochhar said as monetary policy rates come down, FD (fixed deposit) rates get reduced.

"But FDs are only 60 per cent of the deposit base. A 75 bps cut translates into 40-45 bps cut in cost of funds for banks. You have already seen a 30 bps cut," she said.

Transmission will never have a one-is-to-one correlation with monetary policy rates. Deposit rates will depend on other products such as small savings, where interest rates are high; deposit rates will have to be in line with those, Kochhar explained.