Pay for inoperative a/c, cash deposits

You will now have to pay if you don't operate your savings or current account for a year. HDFC Bank, the second largest private sector lender in the country, has decided to charge Rs 50 per month if a customer's savings or current account has remained inoperative for a year.

Brace yourself for more. The bank will also charge its "non-managed" customer if he deposits over Rs 100,000 in cash during a day in their savings account at the home branch. Non-managed customers are typically those clients who do not have a private banking or wealth management relationship with the bank. The customer will have to pay Rs 25 for every Rs 50,000 cash deposit in a day over Rs 100,000 in their home branch.

These fees are part of the new set of service charges introduced by HDFC Bank from January 1, 2012.

According to senior officials at HDFC Bank, the bank introduced these charges after reviewing and benchmarking them with its peers in the public sector, private sector and foreign banking space.

"These charges are not something new. Many of the public sector, private and foreign banks already charge their clients on these grounds. We found some of these charges logical and hence decided to introduce them. For instance, we don't want our savings account clients to use these accounts for business purpose. Hence, we decided to levy a charge on cash deposit at the home branch beyond Rs 100,000 a day" said an official.

The official added that the "managed clients" mostly do large ticket transactions, and hence are excluded from this charge.

The new service charges also include penalty if a standing instruction is rejected, fees on regeneration and physical dispatch of personal identification number (PIN) for phone-banking and internet banking, charges on any deliverable returned due to change in consignee's address.

"Some of these charges are introduced keeping in mind the customers' interest. We want to encourage our customers to generate their net banking PIN online because the scope for fraud increases if there is a physical dispatch. Hence, this charge was introduced. Similarly, we have decided to charge only if a consignment is not delivered because of negative reasons like the consignee has changed the address. There is again a scope for fraud there," said another official of the bank.

HDFC Bank is the first large private banks to introduce new charges and revise existing fees on savings and current account this calendar year.

HDFC Bank has so far not increased the interest rate on savings deposit accounts after the rate was deregulated by the Reserve Bank of India (RBI) late October, 2011. Some of the mid-sized private lenders including YES Bank, Kotak Mahindra Bank, IndusInd Bank, Ratnakar Bank, and Karnataka Bank have already announced a hike in their savings deposit rates.

The bank has also decided to levy a penalty for non-maintenance of minimum balance on monthly basis instead of quarterly basis.

So, a regular savings deposit account holder in one of HDFC Bank's metro or urban branch will have to pay Rs 250 per month if his average monthly balance in between Rs 5,000 and Rs 10,000. If the average monthly balance is less than Rs 5,000 then the charge will be Rs 350 per month.

Earlier, the bank used to charge Rs 750 per quarter for non-maintenance of minimum balance.

The bank has also discontinued the option of maintaining a fixed deposit of Rs 50,000 and Rs 100,000 in lieu of average quarterly balance in the savings accounts.

If the average monthly balance is not maintained, customers will be permitted only three branch transactions through cheques and two cash transactions free of cost in a month. For every additional branch transaction there will be a charge of Rs 75 and the customer will have to pay Rs 100 for every additional cash transaction.

The private lender also said a customer will have to pay Rs 500 if he closes his savings account within a year. The client, however, will not be charged if the account is closed within 14 days. Earlier, the account closure charge was only Rs 100 but only if the account is closed after 14 days and before six months.

The charges on cheques deposited but returned unpaid, photo and signature attestation, address confirmation have been doubled to Rs 100 per instance.

Source: Business Standard