Pitching the customer to buy more by offering him rewards for his purchase has been a common strategy used by retail marketers. This retail strategy is now used by Union Bank to pitch its home loan customers.

Public sector lender Union Bank of India has come up with this new campaign wherein it would be offering loyalty rewards to its home loan customers.

The reward scheme is so designed that the home loan customer gets to earn a discount of 50 basis points in his interest rate for car loan. He would be able to avail educational loans with no processing fee at all.

Apart from these, the bank would also acknowledge its loyal customers who have serviced their home loans on a regular basis for three years with top up loans. These top up loans would be granted for an amount equal to the amount of loan repaid.

Union Bank has shown a huge growth in its retail loan book from Rs 10,000 crore as of March-end 2009 to Rs 13,500 crore as of March-end 2010, thereby recording a 35% growth. With this new strategy, the bank aims to increase its growth rate by a larger extent.

"Through the recently launched loyalty rewards scheme for home loan customers, we want to carry forward the growth momentum we achieved in FY2010 in the retail lending portfolio," said Mr S Govindan, General Manager, Union Bank of India.

As per statistics on March 2010, the bank's home loan book accounted for 67% of its total retail lending portfolio. Educational loans and car loans accounted for 11% and 9% of the total retail loan book respectively.

The total retail lending portfolio of the bank as on March 2010 amounted to Rs. 13, 500 crore.

The bank also has another strategy in process. In order to attract savings account deposits, the bank has plans to grant pre sanctioned loan facililty to its savings account holders.