In whose interest was released long ago, there was a major reason why this segment is considered to be adjusted. If anyone has followed the debate and the sound of industry leaders in this proposal for many months past, we can say that many of these views represent those of the organization in their own interest rather than insights into the systemic effect.

VARIOUS REACTIONS:
The reactions to the current RBI move may vary a little 'expect fireworks - bank quickly wean customers and their bank accounts, which have significant low-cost CASA deposit base. Some of the others can wait for the competition will result in higher interest rates, in general, savings accounts. While the first requires that the view that there are banks that will increase interest rates when the competition is doing tactically, the latter point of view are simply hired banks to fall into a kind of action-reaction cycle will increase.

Both points of view, needless to say, is simplistic. We have seen over the years, how the banking system has managed liberty interest rate on both the loans and fixed deposits. Expect the method, not madness.

On the other hand, it is equally important to see the ways in which the behavior of the customers' response to the initiatives of the bank. Price sensitivity of fiscal savings must be better understood before reliable conclusions can be drawn.

The retail business storage customers are not, have more than one banking relationship. But to expect everyone to dance the movements of interest rates are short-sighted. If at all it would be a small percentage of customers who may be subject to such behavior.

Even hNIS (high net worth individuals), which should be relatively more sensitive to prices, now manages the overall experience of relationship banking.

There is also a significant impact already made by the branding initiatives of banks around the customer experience-segmented.

In addition, we must remember that freedom came years after the banks have the ability to search products and automatic barrier in between deposit accounts and in connection with the ease of the basic unit, partial rupture of deposit accounts .

Another important dimension is that banks now have the ability, in terms of data, processes and systems for behavioral analysis based on complete customer how they can create combinations of product attributes, product pricing, prices Transaction and service standards and obtain the values View and manage customer relationship.

There will be an interesting competitive operating banks will use this new found freedom of prices? Yes, for sure.

It will bring an immediate and significant change in competitive balance among banks in this vital segment of the company? Doubtful, and time.

The banks, particularly in retail trade, there is the business of money and its price alone, especially in the item level. This is a portion of a package of products and the importance of each customer's entire service experience. Requires banks to treat the freedom to grow and expect customers to take the time to come up with their minds.

Source: thehindubusinessline