Asia banks scramble for retail deposits to help liquidity requirements
In an effort to meet liquidity coverage ratio (LCR) requirements contained in the new Basel III rules, banks are keen to maximise their level of retail deposits. Asia has a head start in this area because the region traditionally has a high savings culture, but that does not mean banks are any less competitive in securing valuable retail market share
Savers have been hit hard by the financial crisis. Low interest rates and rising inflation have meant bank deposits have paid meagre returns. But the tide may be turning: in Hong Kong, for example, Citibank is offering clients a cash rebate of up to HK$1,500 ($190) if they put their monthly salary with the bank. While the American bank was simply indulging in a bit of old fashioned promotion, in the future these types of offers could become more common as regulation drags the once sleepy topic
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