ICICI Bank HiSAVE 5.40% AER

pin

Indian bank wants UK savers
By Paul Lewis
BBC Radio 4's Money Box

http://news.bbc.co.uk/1/hi/programmes/moneybox/4667667.stm

Savers in the UK are being offered a market-leading 5.4% rate on their savings, by India's largest private bank ICICI.

Its HiSave account has to be opened and run through the internet.

It pays the 5.4% rate from the first pound and has no restrictions on how much money can be put in or taken out.

ICICI UK Chief Executive, Sonjoy Chaterjee, told BBC Radio 4's Money Box he would promise a good rate for two and half years, but could not guarantee it would stay at 5.4%.

"We are carrying a guarantee of 25 basis points [0.25%] over the base rate up to 31 December, 2007," he said.

"That would be 5% as it stands now.

"We will hold onto 5.4% for a while. I would not like to put a date to it.

"We would not put it just for a month or so. We would hold on to it for at least six months."

Top 10

ICICI UK has set a target of winning £500 million savings from UK customers this year.

But Sonjoy Chatterjee denied that if they achieved that, the interest rate paid would start drifting down.

"We haven't given thought to that so I can't comment yet," he said.

"But we will need to look at the whole balance sheet and the savings side of the balance sheet and take a call on the interest rate, whether we move it up or down."

Mr Chatterjee said he can pay this rate because his bank is big and cheap to run.

It claims to have 10 million internet customers, putting it in the top 10 internet banks in the world.

Security

HiSave accounts in the UK would be processed using the same low-cost platform in Bangalore.

"It is this cost [saving] we are transferring to our customers in the form of this high rate."

He also stressed that the money was safe:

"Unlike a lot of other overseas bank operations here, we are not a branch," he said.

"ICICI UK Ltd is a locally incorporated bank under the Financial Services Authority and carries its deposit guarantee scheme.

"That works out roughly about £30,000. And that is why we did it this way instead of a branch."

The Financial Services Compensation Scheme guarantees the first £2000 deposited in a UK based bank, and 90% of the next £33,000 meaning that the maximum compensation is £31,400.

Mainstream product

With a market-leading rate on savings, demand for the new account could be very high.

Asked if the bank could cope with a lot of applications at once, Mr Chaterjee said:

"It's our desire to take the first steps towards being a global bank and this is our first mainstream product to that end.

"So to process and service and be up to speed with this customer segment is paramount.

"These customers are coming to this bank for the first time so we will pull out all the stops to do that."

Although regulated by the FSA and protected by the Financial Services Compensation Scheme, ICICI UK has not yet joined the Banking Code.

The BBC has learned that an application has now been made and is being considered by the Banking Code Standards Board.

BBC Radio 4's Money Box was broadcast on Saturday, 9 July, 2005 at 1204 BST.

The programme will be repeated on Sunday, 10 July, 2005, at 2102 BST.

pthompson

pin wrote:

Point 3: What's the way the website looks got to do with anything? The bank is regulated by the FSA and they are a big bank, not some fly by night operation.

It's not just the lack of professionalism in the design of their site that bothers me, but can we really trust a bank that builds its web site on MS Windows 2000 (see http://uptime.netcraft.com/up/graph?site=http%3A//www.icicibank.co.uk/personal-banking/savings-account.html ) with all the security flaws that that's famous for?

t_i_g_e_rr

jimclark1967 wrote:

My "test" transfer of £9 has now been completed - took 6 days. Strangely it hasn't left my current account yet despite having arrived at ICICI - must have moved faster than the speed of light or something :rolleyes:
JC

If it didn't come out of your account, who's account did it come out of? I hope it's not mine!!!

jimclark1967

t_i_g_e_rr wrote:

If it didn't come out of your account, who's account did it come out of? I hope it's not mine!!!

Could well be

Still not come out of the current account though the direct debit has been set up - wonder if it would work if i tried to transfer a few million :rolleyes:

JC

HLK

Just a point, if push comes to shove , I can always visit my local branch and stamp my feet.. might be a bit more difficult with this bank.

and to take this to it's logical conclusion.. I think any savings made here will be eventually offset by an increase in taxation to cover all the UK bank staff out of work and claiming benefit...

and before you ask, yes I do work for a bank , albeit in IT.. and I've just witnessed 3000 Abbey staff being made redundant.. ( although not that much made of it in the media....) with more to come... and the majority of those I know who lost their jobs are still out of work months later...

think about it...

jimclark1967

Very true - and certainly not unique to banking. As it happens about 97% of my savings are with a bricks & mortar bank otherwise known as Abbey (Postal ISA 5.35% and Regular Saver 7%)

It's only going to get worse.. increasing use of the internet/machines/robots means that less people are needed to run the economy. This is OK for now as there are millions of baby-boomers approaching retirement but imagine the scene in 30 years time when there might be many more people in their 20s than there are now :mad:

JC

deemy2004

In 30 years time.. they will wonder how we got by with such primitive technologies - as we look back on the 70's ... the greater the efficiency the greater the productivity the greater the wealth generated by individuals, the richer we all are.

meanmachine_2

jimclark1967 wrote:

This is OK for now as there are millions of baby-boomers approaching retirement but imagine the scene in 30 years time when there might be many more people in their 20s than there are now :mad:

JC

I think the opposite is being forecast - not enough young people in the economy to support us old folk (as I will be by then).

There won't be enough workers around to generate enough income to generate enough taxation to keep us all.

It's one reason why immigration is so lax. Isn't the current indigenous birth rate something like 1.8 kids per couple? Nowhere near high enough to maintain the population.

Paul_Herring

http://uk.news.yahoo.com/050512/362/fini5.html

[font=arial,helvetica]New data from the Office for National Statistics suggests that women would expect to have an average of 1.79 children in 2004, an increase of 3.6 per cent on 2003 and the highest level since the 1992 average of 1.8 children.

[/font]

deemy2004

We are headed for a worker crisis !

Not only will there be far fewer workers supporting many more old fogies... but many of those workers will be 'care workers' ! so not contributing to economic growth.