India’s 59 Years Old Private Bank To End Special FD Scheme Soon

On July 14, 2023, IDBI Bank, a pioneer in financial services in India since 1964, introduced a special fixed deposit (FD) programme. For the benefit of retail investors who want to get inflation-beating returns, the new scheme of 375 days is effective from July 14, 2023. The "Amrit Mahotsav FD" of IDBI Bank comes with two special tenures of 375 Days and 444 Days, and the scheme is valid till August 15, 2023.

On a tenure of 375 days, the bank is offering a standard rate of 7.10% and 7.60% for senior citizens while on a tenure of 444 days, IDBI Bank is promising 7.15% for non-senior citizens and 7.65% for senior citizens. Premature withdrawal and closure are allowed on IDBI Amrit Mahotsav FDs, and staff and senior citizen rates do not apply to NRO and NRE term deposits. All other term deposit features and scheme terms and conditions will still be in place.

For the quarter that ended in June 2023, IDBI Bank's net profit climbed significantly by 61.9% to Rs 1,224.2 crore from Rs 756.4 crore in the corresponding period of the previous year. The net interest margin (NIM) for IDBI Bank improved 178 basis points (bps) YoY during the quarter to 5.80% from 4.02% in Q1FY23. Net interest income (NII) for the lender rose by 60.7% during the first quarter of FY24 from Rs 2,487.5 crore to Rs 3,997.6 crore. Operating profit for the quarter climbed by 47%, from Rs 2,051.81 crore recorded during the same time the previous year to Rs 3,018.72 crore in Q1FY24. Provisions climbed by 24% YoY to Rs. 1,190.43 crore during the quarter. On June 30, 2023, net advances were Rs 1,65,403 crore, up 20% YoY from Rs 1,38,223 crore on June 30, 2022.

The gross non-performing assets (NPAs) ratio was 5.05% in the first quarter of FY24, down from 6.38% in Q4FY23 while the Net NPA ratio also dropped, going from 0.92% to 0.44%, QoQ. At the end of the June 2023 quarter, the Gross NPA was Rs 8,762.51 crore, down from Rs 10,969.29 crore in Q4FY23, while the Net NPA was Rs 730.60 crore, down from Rs 1,494.74 crore. As of June 30, 2023, the Provision Coverage Ratio (including Technical Write-Offs) climbed from 97.78% to 98.99% and IDBI Bank's Q1 CASA climbed to Rs 1,28,870 crore, while the CASA ratio was 52.61%. Total CASA and CASA ratio were Rs 1,25,356 crore and 55.65%, respectively, as of June 30, 2022.

Meanwhile, Amrit Kalash, a special fixed deposit offered by the State Bank of India will end soon. Regular depositors receive an interest rate of 7.1% under SBI's 400-day special fixed deposit plan, while senior residents receive an interest rate of 7.6%. On August 15, the SBI Amrit Kalash fixed deposit will expire.