With 50% of India?s population consisting of youngsters, bankers are increasingly targeting kids and teens by offering products that meet their requirements.
And with a third of the population aged between four and 14 years, kids are playing an important role in purchase decisions from consumer durables to automobiles.
?We recognise the changing role of children in purchase decisions and want to harness them by introducing them to banking and money management,? says Maninder Juneja, head-retail liabilities, ICICI Bank.
Meant for kids and teens (up to18 years), ICICI?s Young Stars account is operated and monitored by parents. Children over seven are entitled to an international debit card. Other features include recurring deposit and fund transfer from parents to kids account.
Similarly, HDFC Bank also has a Kids Advantage account. Features include a free education insurance cover upto Rs one lakh. Moreover, amounts in excess of Rs 5,000 over and above a balance of Rs 10,000 gets converted into fixed deposit for a specific period in the child?s name.
ICICI Bank introduced its Young Stars account in 2005 and has seen 100% growth in this segment since inception. Moving forward, the bank plans to take this product to schools through contact programmes.
Private banks are not alone in this race. Even nationalised banks are catering to Gen Next. Indian Bank launched its saving product IB Smart Kid in Aug 2007 targeting kids below 18 years.
?Over the last few years, the age profile of our customers has come down,? says MS Sundara Rajan, chairman and managing director, Indian Bank.
That is not all! Banks are also targeting teens by actively disbursing educational loans. The IT boom and general economic boom has fuelled an interest in professional courses and banks are cashing in on this in a big way.
Indian Bank disbursed a sum of Rs 230.11 crore during the half year ending September 30, 2007 benefiting 16,000 odd students.
?The number of students enrolling for professional degrees like engineering and management is growing by leaps and bounds.
Moreover, many of these students don?t come from affluent families,? points out Sundara Rajan. He says repayment is sure shot as salaries are on the rise even at the entry level.
ICICI Bank is also offers educational loans for courses in India. It is also planning to extend its offering for courses abroad as well.