 The Bank of Ceylon (BoC), the number one bank in the country in keeping true to its innovative spirit in introducing value added products and services to its customers is planning to unveil a new product for the year 2009 under the name BoC Smart Investor Account. The Sunday Times spoke to Mr. C. Samarasinghe, DGM - Product and Development Banking of BoC in order to find out more about this innovative product.
What are you intentions behind introducing this product to the market and under what category will it be placed?
Smart Investor is basically a savings product launched with the main intention of deposit mobilization. Although the market is presently saturated with savings products we at BoC intend to provide a novel savings opportunity to our customers to save a sum which gives them a sense of worth in addition to a solid foundation for further investment.
How does this particular savings product differ to other savings products currently available in the market?
There is a marked difference with regards to our product as it is neither a conventional savings account nor a formal fixed deposit account. It is however an investment account carrying the features of a savings account as well as that of a fixed deposit account. This product allows periodic deposits as in a normal savings account whilst also offering a guaranteed sum as in a fixed deposit account. As this is an investment account this product instills a sense of financial discipline and adherence to a set plan in prospective customers. You will not come across this type of discipline and planning in either a savings or a fixed deposit account. This product directs the accountholder towards a financial target guides him through a plan and rewards him with an attractive interest income. On reaching the target the accountholder will have a sizable sum which he could deploy further capital enhancement either in the form of asset accumulation or investment building.
To which segment of the market will you be offering this revolutionary product and how does it operate?
The BoC Smart Investor Account is targeted towards the fixed income earners who are sensitive to interest yield. The Smart Investor comes with two maturity periods of 2 years and 3 years and offers a guaranteed sum of Rs. 50,000/- or Rs. 100,000/- under each plan. A Smart Investor Account could be opened with an initial deposit (1st month) ranging from Rs. 10,000/- to Rs. 1,200/-. Monthly deposits commences form the 2nd month up to the maturity date are in the range of Rs. 1,200/- to Rs. 1,500/-.
For example, under the three year plan a prospective accountholder may aim at either Rs. 50,000/- or Rs.100, 000/- as his target and he has the option of starting the plan with an initial sum as low as Rs. 1,200/- or Rs. 2,400/-. This monthly commitment will vary according to his initial commitment and on maturity he will have a sizeable sum of either Rs. 50,000/- or Rs. 1,000,000/-.
Under the shorter version of the plan i.e. the 2 year plan the initial commitment may appear a bit high; however the monthly commitment is very low and affordable from the stand of a fixed income earner. I think the Smart Investor provides the best option to a committed individual to save expeditiously but in a less effortless manner. Further options are available to raise the target amount up to Rs. 600,000/- under a single plan.
Are there any eligibility requirements and obligations with regards to this product?
Yes of course, any individual above 18 years of age can open a Smart Investor Account individually as well as jointly. Parents, guardians may also open this account in the name of minors. As for obligations, the accountholder is expected to strictly adhere to the investment plan and deposit his or her monthly commitments without fail. Non adherence would affect the target amount but the interest yield on the account would continue unaltered.
Will you enlighten us on the account opening procedures?
Any Smart Investor Account could be opened at any BoC branch. The bank's online branch network consists of 204 fully fledged branches and over 125 extension offices, which are spread throughout the length and breadth of the country providing easy access to customers.
Accounts are opened against applications and no pass books will issued. In addition to an original contract letter each monthly deposit to be made by the customers will be duly acknowledged by the bank. BoC's online network will enable the customers to deposit their monthly commitments in any one of the online branches. Every accountholder will be issued with bi-annual account statements during the currency of the plan in order to enable the customers to monitor the progress of their investor account.
Any other facts pertaining to Smart Investor you wish to share with us?
As I mentioned earlier, Smart Investor is one of the strategies taken by the bank to mobilize funds inline with the developments in the financial markets.
We intend terminating marketing of this product by April 2009 and hope Smart Investor will fascinate the customers with the smart and innovative options it provides for saving expeditiously and effortlessly.
I would also like to mention the special draw which will take place at the end of each month from January to April 2009, where all accountholders who open Smart Investor Accounts will be eligible. Five winners will be selected every month and a bonanza awaits them as prizes.
Each winner will receive a cash sum equal to the maturity value of the Smart Investor Plan which he has subscribed. What the country needs today is to increase its number of investors and through the Smart Investor Account we plan to create at least 150,000 such investors during a period of three months and forward them to the capital market. |
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