ICICI Bank b2 branchfree banking

by Manshu on April 4, 2012

in Personal Finance

Karthik left a comment about ICICI’s b2 branchfree banking the other day, and that was the first time I learned about this savings account from ICICI bank.

I asked a few people who I thought might have had personal experience with this but they didn’t and neither did they know anyone who did, and looking at ICICI’s website – it doesn’t look like this product does very well and I wonder if they still allow people to open this type of account. I think as you dig deep it’s easy to see why this never caught on so let’s look at some things about this account.

Branch Free Banking

First a little bit about b2 branchfree banking itself. The concept is very simple – you open a savings account which is not associated with any branch, and this account has no balance requirements or in other words it is a zero balance account.

Zero Balance Account

According to ICICI Bank, the two big benefits of this account are that you can have a zero balance account and you can get some extra earnings on this account since this is a low cost account for the bank.

I don’t know how appealing a zero balance account is for most people since a lot of salary accounts are zero balance accounts, and even if they are not – it is usually not a problem to keep Rs. 5,000 – Rs. 15,000 in a savings account.

Auto Sweep Feature

The second aspect of it – which is earning a bit of extra returns certainly makes you stop and investigate more. From what I could gather on their site – the extra earnings accrue because they have an auto sweep feature in the b2 branchless bank account. This works exactly like other auto sweep features where they will move a certain amount from savings account to your fixed deposit and then that will earn a higher rate of interest than the savings account. You can withdraw this money any time and in that sense it is not blocked in the fixed deposit.

No Branch Access or Checkbook

Since this is an online account you don’t get any access to a branch meaning you can’t go to a bank branch for anything and you don’t get a check book either. You can create a draft online which will be couriered to your house and they will charge you Rs. 15 for it. As far as I can see there are no other charges for creating a draft.

No ATM Card

You don’t get an ATM card with this account either and that to me severely limits what you can use the account for. You can only pay bills online using this account or use the Auto Sweep facility, and that’s about it.

That’s not really a lot when you consider that you can pay bills online easily with your other accounts, and if you really did want to benefit from high rates of interest on savings account you are probably better off utilizing a bank such as Yes Bank or Kotak bank.

I find it hard to get excited about this concept with whatever information I could get it and I would certainly like to hear from someone who has opened the account and how it benefited them.

Finally, one odd thing about this branchless banking is that you can only open it if you are resident of one of these cities. Now what sense does that make? You don’t have access to a bank branch, but you need to be resident of a particular city?

Here is a MouthShut review of  the b2 branchless bank account that Karthik left a link to that you may find useful.

This post was from the Suggest a Topic page.

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{ 29 comments… read them below or add one }

moronbuffett April 4, 2012 at 6:49 am

this sounds like ing-direct online accounts in the us.

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Manshu April 4, 2012 at 4:19 pm

That’s an online account too? Do they give out a debit card that can be used or no?

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Ash April 6, 2012 at 9:13 am

ING Direct which is now been taken over by Capital One is an online account. Probably they were the first ones to start this kind of online only account.
HSBC has a similar account in US but they give out Debit cards too. Now a lot of other banks have copied this system in US.
Interest rates are very low in these accounts because the FED has kept the rates to almost zero for past few years.
They dont have crazy requirements like residency of a city etc and opening an account only does not take much time.

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Manshu April 9, 2012 at 3:44 am

Thanks Ash.

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ANIL KUMAR KAPILA April 4, 2012 at 2:16 pm

I don’t see any utility of having this account. I am a customer of ICICI Bank and find that whenever I face any problem I have to visit the branch to get it resolved. You can call customer care or email them but ultimately nothing moves till you visit branch. The concept of branchless banking is good but meaningless without chequebook and debit card facility.

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Manshu April 4, 2012 at 3:50 pm

From their website, they haven’t updated the savings bank interest rate as it still shows 3.5% and even the fixed deposit rate is the older one. Looking at that dated information there makes me wonder how many people are using this at all.

But the other aspect of this is that the original comment and some other people have called this too good to be true etc. and I don’t know what I’m missing but doesn’t seem to be anything particularly great about this.

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Ameet April 4, 2012 at 5:00 pm

i have this account way back in 2008 .since then i m using it to get extra bit of interest.auto sweep is the only good thing in it ,nothing else.The interest rate is also not same as bank FD.currently it is 6% which is what kotak is also giving on its saving account.hence i feel ,b2 banking with all its limitation is not that great product as one can all these features in kotak or yes bank saving account.

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Manshu April 4, 2012 at 6:14 pm

Thanks for your comment Ameet! It’s always good to hear from someone who has used the product and in your case, you’ve used it for very long. Thanks

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DJSays! April 5, 2012 at 10:34 am

Hi,

I had read a rather negative review about this ICICI Account somewhere on the Net quite a few years back. It is not something new and meaningless without CC/DC & Cheque Book.

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Sham April 5, 2012 at 2:16 pm

Hi, I am using this account for last 2- 3 years. My experience with this product is good. I have salary account in ICICI only .So when salary gets credited I transfer the amount by keeping only EMI & SIP & approx expenses amount in salary account. From there I use the same for bulk investment or expenditure, which can be 2-3 -4 or more months away. Earlier I was not able to keep track of excess amount. I know this can be done by using other saving account but then there will be minimum amount required to be maintained. Thus this account is suitable for my purpose .The customer support is available through phone & chat which also I used hardly. Only one bad experience I had ,once I tried to pull back the amount in SB account due to some tech issue it was giving the error message so tried for 3-4 times & next day I seen the money was transferred that many times. But as I don’t think this is product related fault, this would have happened to normal account too.

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Manshu April 5, 2012 at 6:52 pm

That’s good to know Sham – so in a way you are using this as your secondary account and that makes tracking expenses easier. That’s an interesting use of it.

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Karthik April 5, 2012 at 2:35 pm

[I was the one who had put the comment in the Suggest a Topic page].

The sole reason I found this better was the better interest rate with all options of liquidity (hence too good to be true)

I tried to open this account. The experience of opening the account itself was very painful. After spending close to 45 minutes, I gave up. There were one error or the other popping up in the final stage of registration and some of them incomprehensible. I assume this is one of those ‘innovation’ activities within and not taken seriously.

So I have decided not to open this account.

Thanks to all people who commented.

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Manshu April 5, 2012 at 6:51 pm

Thanks for sharing your experience Karthik, and I think based on what others have reported here you are probably not missing out on much.

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Jitendar Solanki April 5, 2012 at 8:16 pm

Hi Manshu,

Branchless banking can be a great use if the services are remarkable.Thsi reminds me of Citibank which started in India and had almost branchless banking although with option of cheque book & debit card.Even today branch banking is very limited and most of the services are online. Accounts like ICICI can be of good use for tracking expenses by making it only for utility payments or other auto debit options.

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Porbu April 6, 2012 at 9:25 am

I have this account for over 3 years now and I am very happy with the product. This comment holds some more information about the account.

1) This account can only be opened online. There is a pretty elaborate online form which needs to be filled. You get to select your username and set your password. Your are allocated an account number instantly. Some one from the bank will visit you to collect the docuemnts . (Identity proof, age proof, PAN etc)

2) This is a online only account. They will send you a welcome kit with a card which will have the security code for transactions. There is no debit card or cheque book.

3) The only way to move money into the account or withdraw money form the account is by linking your existing savings bank account (Any bank) . (You will have to fill a small online form and provide a cancelled cheque). you can link as many accounts as you like.

4) Any amount over 5,000 gets sweeped in into a FD. The features is similar to a sweep in account. On withdrawal, the last FD is broken first.

5) There are a host of convenience features like bill pay, e wallet etc.

6) Customer care is through calls and online chat. Since it is esasy to use, i have very rarely utilised this.

7) Payments from other account (To move in the money) can be scheduled as one time, or as a recurring payment. The only draw back is that it needs a week. For ex, if you log in on the 1st, the payment can be scheduled only on the 8th.

8) There is a online tour at https://b2.icicibank.co.in/VirtualTour/index.html.

9) the B2 account number is recognised in regular icici netbanking and you can transfer money from your existing ICICI bank account into B2 without actually registering the ICICI savings account in the B2 netbanking.

I will give my usage of the account in the next post.

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Porbu April 6, 2012 at 9:39 am

The reasons:

I have been a follower of a lot of personal finance blogs and the one thing that was repeatedly suggested by many was the need for a personal emergency fund which will have 4 to 6 months expenses set aside. I do agree that this can be done through various means.

a) Opening a RD and contributing a small amount every month. This will work for people who want to build the personal emeregency corpus over time and do not have a lumpsum to set aside.
b) People who have lumpsum amount in hand can create an FD. If the lumpsum amount is not at hand at one go, they can create 3 or 4 FD’s with some time interval.
c) Open a savings account with some bank like LVB or Yes bank and keep the money there. The money saved will earn decent returns and this will also provide you with an option of topping up your emeregency fund.

The reason i went through the B2 route is the lack of debit card or cheque book facility. I did try the above mentioned methods, but always ended up using the money for some reason or the other. (This is due to my weak will power and not a problem with the above mentioned solutions)

The way i have accumulated over 2 lakhs (yes in 3 years) is as follows.
1) Scheduled a monthly move in from my IDBI account to B2. (Works similar to RD)
2) Whenever i get any dividend from shares or dividend from mutual funds, additional bonus from company etc, i log in into the B2 account and schedule a move in. This way, i do not get to spend the additional income that i have recieved.
3) Every quarter, i transfer any interest recieved in my other savings account into my B2 account.
4) Any additional surplus that i recieve, goes into B2.

Any amount geater than 5000, gets convereted to a FD and i have a bunch of FD’s created in B2. (You can create on manually as well. ) These get auto renewed every year. These earn a decent interest rate (not the highest in the market) and compared to a regular savings account, it scores better. (i do not have a sweep in account).

The only transactions that i have done over time is scheduling payents into the accoount. I have not moved out a single rupee. This has helped me be disciplined and also to build a decent emergency corpus. The day i need the money (For a real emergency) I can easily schedule a “Move money out of B2″ into my savings account.

PS: Really sorry for the long and annoying posts. I have just tried to explain a little about the product itself, and how i have used it.

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Porbu April 6, 2012 at 9:41 am

This was supposed to be the first comment. Not sure why it did not get posted :)

I have this account for over 3 years now and I am very happy with the product. This comment holds some more information about the account.

1) This account can only be opened online. There is a pretty elaborate online form which needs to be filled. You get to select your username and set your password. Your are allocated an account number instantly. Some one from the bank will visit you to collect the docuemnts . (Identity proof, age proof, PAN etc)

2) This is a online only account. They will send you a welcome kit with a card which will have the security code for transactions. There is no debit card or cheque book.

3) The only way to move money into the account or withdraw money form the account is by linking your existing savings bank account (Any bank) . (You will have to fill a small online form and provide a cancelled cheque). you can link as many accounts as you like.

4) Any amount over 5,000 gets sweeped in into a FD. The features is similar to a sweep in account. On withdrawal, the last FD is broken first.

5) There are a host of convenience features like bill pay, e wallet etc.

6) Customer care is through calls and online chat. Since it is esasy to use, i have very rarely utilised this.

7) Payments from other account (To move in the money) can be scheduled as one time, or as a recurring payment. The only draw back is that it needs a week. For ex, if you log in on the 1st, the payment can be scheduled only on the 8th.

8) There is a online tour at https://b2.icicibank.co.in/VirtualTour/index.html.

9) the B2 account number is recognised in regular icici netbanking and you can transfer money from your existing ICICI bank account into B2 without actually registering the ICICI savings account in the B2 netbanking.

My usage of the B2 account is given in the previous comment by me :)

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Manshu April 9, 2012 at 3:44 am

This is an amazing comment, and I’m glad you wrote this. It goes to show how different people can make different uses of the same product, and what seemed like a shortcoming to me (lack of debit card) – you have turned it into a positive aspect. It’s amazing. I’m going to share this comment on OneMint’s FB wall – thanks for sharing!

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Porbu April 10, 2012 at 3:50 pm

You are welcome Manshu.

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M. B. Khurshid October 19, 2012 at 9:48 am

I have this account, which I opened some three years back. I used it for sometime, but then I forgot its password and in the mean-time, I also shifted to a new address.

Now when I request ICICI customer care to reset my password, they say that it will be sent to my previous address, where I no longer reside. Therefore I requested address change but it couldn’t be executed by ICICI despite several requests. Please suggest a solution, if somebody has faced this kind of problem and got any resolution.

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Satyanarayana B November 7, 2012 at 11:21 pm

Hi,
Recently i got b2 branchfree banking kit but i don’t know how to activate that account. I did’t get pin no please suggest me once again.

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PMG November 26, 2012 at 11:12 pm

I am using ‘b2 Digital Banking Account’ since last 2 months.
There are no Application bugs as mentioned by some users in early account launching years i.e 2008,2009.
All functionalities work fine as per my experience.
Although, ‘Premature Withdrawal’ takes a day to get processed.
Autosweep occurs every saturday. So it skips the interest on funds deposited till saturday.
However, really nice product from ICICI Bank which keeps the funds invested in high profit instruments without any human intervention due to its ‘Autosweep Facility’.

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Ravi Kiran December 4, 2012 at 7:29 pm

Hi Manshu

Its a really varying experience for sure, I had opened my b2 account online and i forgot my ID and Password, I am calling the phonebanking and no one cares to answer my call.

I tried opening the account for my wife as well, i faced the same issue that Karthik faced, the last screen after entering all the details wouldnt go through.

really a bad experience until now.

Cheers
Ravi

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Jayachandran January 11, 2013 at 12:17 pm

Hi Manshu,
Thanks for the article and it was very useful for me.
I recently opened this account in Dec 2012. Account opening/Activation was easy with no technical or document issues. This is now my de-facto EM-Fund account and the auto-sweep for above 5000 is sweet . No penalty if you reverse-Sweep . I like this very much and good product.

Also for every Matro City there is one or 2 dedicated branches to handle B2 account customer grievance .So no need to worry if any human interaction is needed i believe.

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Lavanya Sethi February 2, 2013 at 12:24 pm

I am Lavanya.N holding ICICI account in Delhi Vikaspuri Branch branch for more than four years. On 11th of December 2012, myaccount statement showed that there were three VPS transaction made using my ICICI Debit card. But the card was with me. So Immediately I called customer care and asked to block my card to stop further invalid transactions happening from my card.
When I enquired customer care, I was asked to file a fraudulent case and as said I gave a complaint about this issue in Police station on 12th Dec 2012. And on further enquiry with ICICI customer care I came to know that all the three VPS transaction was made in 3 different shops in Bangalore.
Hereby I kindly request you to suggest necessary action to find out the fraudulent that has happened and help me in getting back my money which is altogether a total sum of Rs.5640/- .
Following are the transactions made in Bangalore.
No Value Date Transaction Date Description Withdrawals Available balance Time
11/12/2012 11/12/2012 VPS/SMART-NANDI/20110111124321/0 2,330.00 6,920.66 12.44
11/12/2012 11/12/2012 VPS/TRINETHRA S/20110111130344/0 2,310.00 4,610.66 13.04
11/12/2012 11/12/2012 VPS/KANTI SWEET/20110111164251/0 1,000.00 3,610.66 16.43

Please help me in finding this fraudulent transaction that has happened from my ICICI account. I have also filed a complaint in ICICI as well as here, http://www.consumercourt.in/net-banking/6828-icici-net-banking.html at consumer court site but so far no action has been taken on this case.

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Manshu February 3, 2013 at 10:44 pm

I’m sorry to hear about your trouble Lavanya, unfortunately I’m not well versed with what needs to be done in such cases and apart from the steps that you have already taken I’m unable to recommend anything else to you. All the best.

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Pradeep Shetty February 8, 2013 at 4:24 am

Hi Lavanya,
Here are the steps that you need to do ASAP,

1. Immediately block your card and netbanking access
2. Go to the police station which has jurisdiction of your ICICI branch and file a complaint about fraudulent transaction, collect a complaint reciept. Submit complaint receipt to the bank and then fill out a Chargeback form and in that mention that you have’nt authorized this transaction and submit it to branch manager along with a written complaint. ********Please make sure you take photocopy of police complaint before giving it to cops and once you get a receipt, get it attested by them on the photocopy. Do the same with chargeback form and for branch manager letter too and get it attested by branch manager**** This is because at any point if you want to sue Banks for deficiency of service for not returning your money though it is proved fraudulent, you need to submit copy of all the letters to ConsumerForum to file a case against them.*********

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Sadek August 23, 2013 at 11:30 pm

I loved this initiative, and just applied for icici b2 a/c.
If there are any problem, then where to report that?

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Vetrivel September 11, 2014 at 9:57 am

Can this account be used for linking with demat account and related transactions?

Reply

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