Catholic Syrian Bank customers could not get money because of its name; here’s what went wrong

According to the Reserve Bank of India’s (RBI’s) latest data, deposit insurance covers 92% of the total number of accounts in India but only 28% of the total deposits with the banking system.

Private sector lender CSB Bank recently revealed that its customers faced a lot of issues with their financial transactions due to the bank’s erstwhile name Catholic Syrian Bank. The bank’s NRI customers had difficulties while making remittances due to the word ‘Syrian’ in the name, as many foreign financial institutions have ‘banned’ Syria from having any financial transactions. “Most of our deposits are from NRI sources. Many customers were not getting the amount in NRI remittance transactions because remittances were automatically filtered out by foreign banks on seeing the name ‘Syrian’,” C V R Rajendran, Managing Director and CEO had said in a statement in July this year, while explaining the rationale behind changing the name of the bank to CSB Bank. Interestingly, CSB Bank’s IPO opened for subscription today, and was subscribed about 56% so far.

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Notably, the CEO also highlighted a misconception among the general public that the bank is owned by a particular community. “Though it has its branches in many states across the country, there is a misconception among the general public that the bank is owned by a particular community and this is not true,” he had said. Many customers even within India were averse to conducting any business dealings with the bank for this reason.

Foreign customers, having good business connections in India, also avoid dealing with the bank for the only reason that part of the name either indicates a religious community’s interference or represents a foreign country, added the bank in the statement. The bank revealed that both exporters and importers also suffered when the bank’s letters of credit were not accepted by other financial institutions. Following these issues, the Bank had changed its name effective June 10th.

CSB Bank IPO to raise up to Rs 410 crore opened for subscription today. The issue has received bids for 21.54 lakh shares, as against the the issue size of 1.15 crore, implying a subscription of 20 per cent. Kerala-based CSB Bank’s IPO is being carried out to meet RBI’s reglulation with regard to listing. CSB Bank IPO will remain open till November 26th, Tuesday. The price band has been fixed between Rs 193 and Rs 195 per share. The minimum bid lot has been fixed at 75 equity shares, and in multiples of 75 equity shares thereafter. The bank is set to  finalise basis of allotment on December 2 and will credit equity shares to shareholders’ DP accounts on December 3, Axis Capital said in its IPO note.