Kathmandu, October 17:

NIC Bank Ltd unveiled a new deposit product called NIC Sikshya Kosh’ with an aim at inculcating the habit of putting aside small amounts of money every now and then to ensure a child’s future education spending.

Sashin Joshi, chief executive officer of the bank, today announced the launching of the new product, which the bank claims is a unique and never-before in the banking history of the country. The new product is targeted at parents and guardians planning to put aside funds for their kids’ future university education, he said.

“NIC Sikshya Kosh, bundled with attractive features, has never before seen in the market,” claimed Tej Bahadur Chand, official at NIC Bank. According to him, accounts can be opened with an initial deposit of Rs 100. A 12-month tuition scholarship worth Rs 1,000 per month to five account holders will be offered every quarter through a lucky draw and the interest rate is up to five per cent per annum.

To be eligible for the scholarship scheme, account holders’ minimum balance should be Rs 25,000 and five per cent interest will be paid on balances of Rs 300,000 or above.

“The product comes with a complete flexibility, as deposits can be made of any amount, any time and at any NIC Bank branch,” said Chand. Other benefits of the product are 25 per cent discount on locker facility, 50 per cent discount each on draft and traveler’s cheque issuance, no fees on inward remittances and free ATM debit card for any account of parents.

Withdrawal of money from the account can be made after the account holder becomes 18 years old. Alternatively, the account can be continued. Withdrawal prior to 18 years will be subject to a flat charge to the rate of interest on each withdrawal. This new product has come after a successful launch of NIC Life Savings account, the one and only deposit product bundled with life insurance, in which the bank has been able to garner deposits of over Rs 1.5 billion, said Joshi.

The bank has made a net profit of Rs 110 million during the fiscal year 2004-05, which is an increment of 35 per cent over the preceding year, he added. The deposit base of the bank has touched Rs 6.25 billion and it has made investments worth five billion rupees so far.