[sbinews] Private banks to charge customers not using home branch

  • From: rajendra.pai@xxxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Sun, 28 Dec 2003 07:05:21 +0600 (IST)

Private banks set to charge customers not using home branch 

Good-bye anywhere banking 
(Business Standard) 
Freny Patel in Mumbai 
Published : December 27, 2003 

If you were sold on the idea that you were banking with a bank and not a 
particular branch, think again. 

This concept of ?anywhere banking? is set to die as banks have started charging 
customers who choose to bank with branches other than their home branch. 

Come January, depositing funds into ICICI Bank accounts at branches other than 
the account holder?s home branch, will attract a transaction fee. 

Private sector banks ? HDFC Bank, Global Trust Bank and IDBI Bank ? have put 
limits on the amounts one can withdraw or deposit at branches where the account 
is not maintained. 

Withdrawals and deposits of up to Rs 50,000 per day do not attract any charge. 
However, sums beyond Rs 50,000 will require a fee varying between Rs 2.50-Rs 
2.90 per Rs 1,000 withdrawn or deposited. 

The ICICI Bank will levy an minimum fee of Rs 100 for every cash deposit into 
one?s savings account at a branch other than where the account is maintained. 

This private sector bank allows three free transactions every quarter, but 
levies a fee from the fourth transaction onwards, irrespective of the sum 

?The idea is to plug the misuse of bank savings accounts being used as a 
current account,? said ICICI Bank joint general manager R Muralidharan. 

The ease and freedom anywhere banking affords ? having access to one?s account 
or allowing access to one?s account ? till recently came without a price. 

Many traders have taken advantage of ?anywhere banking? by opening a savings 
account instead of a current account, as the latter attracts a larger minimum 
balance with no interest payable on balances. 

Banks have seen how traders can get their associates sitting outside the city 
to deposit cash into their savings account, which they can then access 
immediately free of cost. 

?More than 70 per cent of transactions are happening outside the branch, and 
more than 99 per cent of account holders do not deposit cash more than once a 
month, if at all,? ICICI Bank officials said, rationalising the move. 

But there are a host of account holders belonging to the older generation who 
are not comfortable with tele-banking, Internet banking or even using ATMs. 

?Transactions on the Net work out 60-70 per cent cheaper for the bank, and this 
explains why banks are trying to migrate customers to use the technology 
platform with free offers of demand drafts, etc,? said HDFC Bank officials. 

HSBC, which also used to levy a fee for cash withdrawals from branches but has 
since stopped, said: ?Today we levy no charges if a customer chooses to bank 
the traditional way. There is a pull factor to encourage him to migrate to 
other delivery channels, but no push factor.? 

Private sector bank officials add: ?Traditional banking puts extra load on 
branches and the quality of service thereby suffers. Especially at a time when 
we are trying to promote cross-selling.? 

Foreign banks require a minimum quarterly balance between Rs 10,000-25,000, 
which help off set costs to a certain extent. Citibank on the other hand, 
introduced Suvidha, which essentially only allows access to remote banking. 

Today, high value amounts being transacted through savings bank accounts is 
abusing the system. ICICI Bank?s Muralidharan pointed out that with the 
introduction of real time gross settlement (RTGS), the abuse to the system 
might get partially resolved. 

Said ICICI Bank officials, the abuse to the system is to such an extent that a 
deposit made at 9:00 am in the morning in Salem is withdrawn within half an 
hour in Mumbai as the depositor and account-holder converse over cell phones 
and synchronise the two transactions. 

This is as opposed to the trader paying for a telegraphic transfer or a demand 
draft, which takes a day or so. 

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