Products For Banks & Their Customers


Fully Flexible Bank Deposits

Tasthana means as flexible as the stalk of a lotus. It is much more than an innovative deposit product. It is a customer acquisition product and will help the banks to acquire new customers and more deposits which in turn will lead to more money in the banking system to lend.

Tasthana overcomes some of the inherent flaws of current bank deposit systems by:

  •   The principle deposit amount can be increased or decreased by the bank customer.
  •   The bank deposit tenure time can be modified.
  •   The payoff amount can be deposited amongst multiple accounts.
  •   Any amount can be withdrawn by the customer in middle of the tenure.
It is like a Rubik Cube where the Principal, Tenure, Pay-outs can be modified as and when the user chooses.
It is only the Rate of Interest which the bank chooses.

Tasthana computes TDS automatically and factors Form 15 H/G apart from calculating Penalties and GST. Tasthana has Reverse Annuity with single and multiple beneficiaries, each getting the same or different amount. The Reverse Annuity can be Amount Based with or without Top-up or Tenure Based. It combines all Sweep Deposits if the interest rate is the same. In short it is a one stop super market for deposits as it handles all the current features of the existing deposits and much more.

Tasthana is under tests & validation and will be launched by December 2018.

Some of the Salient Features of Tasthana

  •   Converting a Deposit Account to Recurring and vice-versa
  •   Combining Auto Debit Sweep Accounts. This is a huge help in reconciliation of accounts
  •   Consortium of Depositors (3 and more)
  •   Corpus amount at the end of tenure.
  •   Withdrawal from Recurring Deposit
  •   Annuity Products with Gestation Period, with multiple beneficiaries and varying amounts credited
  •   Calculation of Interest and TDS automatically each month/quarter
  •   Generation of Reports

Tasthana Touch Points

Tasthana, KYC, Risk & Compliance, CASA, Penalties, Payments, Reports, TDS, GL, GST, Rate of Interest, deposit, bank, Annona, AnnonaSolutions, Reverse Annuity, Sweep Deposit

Tasthana was curated by banks and please see the matrix below:

Problem Problem Definition Solution
1 Regulations Different Interest Rates for the Same Tenure All deposits have the same interest rate for the same tenure
2 Sweep Deposits Sweep Deposits - Whenever a new sweep deposit was created it was a new deposit. This meant many deposits gets created and it becomes very hard to reconcile with so many deposits and with withdrawals it becomes still harder. Combining all Sweep Deposits into one deposit if their interest rates are same. This results in very few deposits as most of them get clubbed together
3 Asset Liability Mismatch A Deposit is a Liability to the bank. The bank has to lend against this deposit. Thus it has to have a match against this liability while lending. If the entire deposit amount is withdrawn then it affects the assets as it has no liabilities. In order to mitigate such a mismatch a part of the deposits say 40% is kept as Fixed which the customer cannot touch. He/She can withdraw from the balance 60% or the Variable Component as partial withdrawals. If the Fixed Component is touched the deposit closes.
4 Consortium of Depositors Required more than 2 depositors to have a deposit account More than 2 depositors can open a Deposit Account. Each person would have a have a percentage in it. For example say 4 people have a deposit then they could share it as: 35%, 25%, 16% and 24% making it 100%. This would mean that any modifications would also be done accordingly as per the percentage . Please note that even the joint depositors have the deposit as percentage. It can be 50 - 50, 60 - 40, 72 - 28, etc.
5 TDS TDS is an issue with various deposits having various tenure and varying rate of interest It computes TDS automatically irrespective of tenure and rate of interest with any modification made any time
6 Form 15 H/G Form 15 H/G is for Tax Exemption and it has to be integrated with the system It can be downloaded, filled up and sent. Once the Bank receives it they can stop the TDS from that moment onwards. Whatever TDS that has been paid prior to receipt of the Form 15 H/G has to be claimed back from the Tax Department by the Customer
7 Location Where would the Application Rest? The application would rest in the bank and the customer would first log in the bank using User ID and Password and then access it
8 Business Scenarios Static Interest Rate, Rising Interest Rate and Decreasing Interest Rate The customer does not lose out when static and benefits in the rest two scenarios and the bank does not lose out.
9 Large Deposit Can it accept large deposits and what would be the extra outgo for the bank? We have taken the total deposit to ₹ 34 Lakh Crores. No bank has such a large deposit in South East Asia. The total outgo comes to maximum 0.07% of the total deposits
10 Reverse Annuity Can it configure a Bank Deposit for Reverse Annuity? It calculates it both Amount Based and Tenure Based. For amount based, if a deposit of say ₹ 1,00,000 is created and assume a sum of ₹ 5,000 is to paid each month it pays the sum each month till it becomes 0. It can be topped up and continued or closed.
For tenure based, if we consider the same deposit of ₹ 1,00,000 with an outgo of ₹ 5,000 each month then the tenure could be fixed for say 6 months, 15 months, etc. at the discretion of the issuer and the funds would be disbursed for up to the mentioned month and then it stops.
11 Reverse Annuity Can it pay to multiple beneficiaries different sums and varying tenure? It can pay multiple beneficiaries multiple different sums either amount based or tenure based. It can also pay additional sums as desired by the deposit holder
12 Integration How would the Integration with Core Banking happen? It will integrate seamlessly with core banking software and it will not affect the working of any module in Core Banking. It will have the same touch points as the regular deposits. The only difference here is that there will 2 reports - one for regular deposits and the other for flexible deposits. Also the entire deposits can be migrated to the new deposit.

Tasthana Presentation

The reason why flexi deposit is better are:

  •   It empowers the customer. Imagine a customer now doing all the actions which previously only a bank employee could do.
  •   It gives more than that of the regular deposits available now with the banks but the banks do not lose out.
  •   The customer now has a regular account with the bank and he/she will not exit or close it down as that of a Regular FD, once matured the account is closed.
  •   It caters to all forms of Deposits including Sweep and Reverse Annuity.
  •   The banks now have a Deposit Product with a Savings Bank Usage. This changes the way Savings and Deposit Products are used.
  •   They have a Deposit Supermarket where all Deposits are under 1 head.

Regulatory Norms:

  •   All Interest rates are de-regularised
  •   Interest is tenure based
  •   Any deposit if topped up (Increase Principal) or withdrawals (Decrease Principal) will have the interest rate. This changes the way Savings and Deposit Products are used.
  •   It is only when the tenure changes does the rate change
  •   For example a deposit of Rs. 1,00,000 for 1 year at 6.75% per annum, if topped up by Rs. 12,000 after say 17 days will carry the same interest rate of 6.5% as the tenure. Similarly for withdrawals, the balance amount will carry the same interest rate. This is irrespective of the top-ups or withdrawals as long as the deposit continues.

Benefits of Tasthana compared to the current Deposits:

  •   When interest rate is static or decreasing, the customer earns marginally more as compared to the regular deposit
  •   The bank’s net outgo is at the most 0.14% of the deposit amount which is insignificant
  •   Apart from the flexibility other gains are combining Sweep or Auto Deposits when the interest rate is same.
  •   Reverse Annuity with multiple beneficiaries, Automatic TDS, Penalties, GST, etc.
  •   When the interest rate is going up the customer ironically does not gain as top-ups and withdrawals continue with same interest rate until and unless he/she increases the tenure. Also the customer never loses out in this scenario as they can always open a new deposit