Romesh Sobti, executive vice president and CEO of ABN Amro Bank (India), has an uncanny habit of making news in financial circles. Two years ago, he attracted attention when he decided to leave the Dutch bank.

No formal announcement was made, but it was no secret that Sobti was moving to Development Credit Bank, a domestic private bank, as managing director.

Barely a week before he formally took over as head of DCB, ABN Amro managed to woo him back by giving him bigger responsibilities and making him head of consumer and mid-market banking for Asia Pacific.

Last week, he hit the front pages again, this time by announcing the lowest-ever rate for home loans. A one-time promotional offer, ABN Amro has pegged the rate at 6 per cent for the first year and 6.5 per cent for the second year.

This is irrespective of the tenure and size of the loan. Other players are hawking home loans at rates between 7.75 and 9 per cent.

For Sobti, 53, this marks another eye-catching initiative for his bank's retail banking foray. Last year, ABN Amro tied up with the Barista chain of coffee shops to open its first Bancafe in Bangalore. Now there are three other Bankcafes -- two in Delhi and one in Kolkata.

The bank branches attached to the coffee shops open at 1000 IST and close at 1900 IST. The Bancafes allow customers to walk in anytime and look at the interactive screen on insurance and mutual fund products and strike deals for car or personal loans even as they sip hot coffee with, say, their travel agent.

Mere gimmicks? Sobti denies this. "No gimmick can last for long. Even technology can give you an edge only for six months, by that time the competition catches up with you. One needs to continuously innovate to engage customers," he says.

Sobti is essentially a wholesale banker trying to learn a few tricks in the retail game. Till recently, ABN Amro had no clue about retail banking. It started from scratch in October 1999 when it bought out Bank of America's Rs 700-crore (Rs 7 billion) auto loan portfolio.

Today, the retail business accounts for about half of ABN Amro's Rs 10,000 crore (Rs 100 billion) balance sheet. "We are offering the entire universe of financial products but the focus on retail business is more visible because this is a relatively new business for us. We'll soon open our asset management company," Sobti says.

An avid golfer who loves playing cricket when he has the time, Sobti wants to be different when it comes to developing retail banking products. Take the case of home loans where the bank has made a beginning. The interest rate was 6 per cent in the first year, 6.5 the next year and a floating or fixed rate from the third year on.

Now, unlike other banks, which peg the home loan rate below their prime lending rates, ABN Amro's actual home rate will always be higher than its home loan PLR. For instance, its home loan PLR is now fixed at 7.25 per cent.

The fixed rate is 1 per cent above the PLR (that is 8.25 per cent) while the floating rate is 50 basis points above it (7.75 per cent). This has been done to ensure transparency.

Borrowers will be able to hedge their risk by choosing a combination of fixed and floating rates in either a 60:40 or 80:20 proportion. The bank is also ready to fine-tune the equated monthly instalments by offering customers a step-up or step down structure. In a step-up structure, the EMIs go up progressively and the reverse is true for a step-down structure.

Will he refinance home loans of other banks on these terms? "Why not? But my target are the fence-sitters," he says. Isn't he late in this segment? "Nobody is late. The market is growing by 30 per cent every year," he shoots back.

The key to Sobti's retail strategy is engaging customers. When the bank launched its credit, he topped the product with an extra bit -- keeping the customers informed about the status of the card though SMS alerts. "For every item he buys through his card, we remind him about his credit status through SMS. We keep engaging him," he says.

Another key element is speed. Auto loans are originated on the web where the dealer punches in the application forms. If the customer's credit record is good, he can get his loan in 30 minutes flats.

How does Sobti keep himself engaged in this fiercely competitive banking world? When he is not playing golf or cricket, he watches Hindi films with his family. "Spending time with your family and watching films are great stress-busters. Competition is now built into your DNA. There is no escape from it," says Sobti.