Get ready to pay more for basic banking
The services that you may now have to shell out more for include SMS alerts for banking transactions, annual charges for your ATM card, and issuance charges on ATM cards. HT reports. What you should look atindia Updated: Jun 15, 2013 02:52 IST
The services that you may now have to shell out more for include SMS alerts for banking transactions, annual charges for your debit/automated teller machine (ATM) card, and issuance charges on ATM cards.
Check your bank statement carefully and look for charges against services. Here is a list of services that are most likely on the charge-it list of banks.
Pay for SMS alerts
Banks including HDFC Bank and ICICI Bank have started charging customers for SMS alerts for transactions. HDFC Bank notifies on its website, "Effective April 1, customers registered for InstaAlert service with ‘SMS’ as the alert delivery channel, would be charged."
HDFC Bank’s salary and savings account holders will pay R60 per annum and current account holders will be charged Rs 100 per annum. ICICI Bank on its website states, "With effect from May 1, all savings account customers availing alerts facility through an SMS will be charged Rs 15 per quarter, inclusive of taxes."
However, ICICI Bank has kept the facility free for accounts such as salary account, senior citizen savings account, silver savings account and privilege banking.
Kotak Mahindra Bank, on the other hand, will reduce their charges on SMS alerts from July 1. It notifies on its website for savings account holders: The daily balance SMS alert that costs Rs 200 per annum will be reduced to Rs 120 per annum from July 1. SMS for weekly balance, transactions and value added alerts will cost Rs 60 per annum from Rs 75 per annum with effect from July 1.
Some banks do mention that select debit or credit card transaction alerts will continue to be free of cost. So do check your account and service to see if you are going to pay more.
Annual fee and issuance fee
Some banks are now charging an annual service fee and an issuance fee for debit or ATM cards. For example, Axis Bank states that the annual fee on international debit cards for metro and urban centres are being revised from Rs 100 to Rs 150. For semi-urban and rural centres annual fee is being revised from Rs 50 to Rs 100. From May 1, prime salary account customers will have to pay R100 as annual fee for debit cards.
Also effective May 1, for metro, urban, semi-urban and rural centres, Axis Bank has revised issuance fee to Rs 150.
Meanwhile, according to PTI, state-owned Canara Bank will levy about Rs 112 annual fee on its ATM debit cards from July 1. This will be charged on completion of one year from the date of issue or renewal of the card and from thereon will be charged yearly. The bank till now was issuing the cards free of cost.
However, the annual charge will not apply to debit cards issued to customers with Canara small savings account, basic savings bank account and financial savings bank account. Also Kotak Mahindra Bank states, "From July 1, in case of privy league debit card with optima/magna feature, issuance and annual charge of Rs 2000 will apply to non-optima/magna customers." This is referred to privy league platinum debit primary and add-on card holders.
Cash deposit charges
Banks are also charging for cash deposits at its branches. Punjab National Bank, for example, has revised the cash deposit charges at all branches within the same clearing centre and city. From April 2, Re 1 per Rs 1000 or a minimum of Rs 25 per transaction is being charged on select products such as saving account. However, there will be no charges for depositing cash in products such as recurring deposit.
What triggers revision in service charge?
Banks hike prices on their services due to increase in their costs, need to improve other income, regulatory requirement or to curtail misuse of services.
"A regulatory requirement such as moving from a magnetic strip card to a chip-based card can have an impact on a bank’s cost, which then gets passed on to the customer," said RK Bansal, executive director, IDBI Bank Ltd. "Also there have been instances where customers misuse free services. So banks keep a tab to curtail such incidents."
The trigger for charges on SMS was again due to regulatory changes.
"Earlier telecom service providers used to charge 2-4 paise, which now has gone up to 25 paise per SMS," said Bansal.
Whatever the motivation of the increased cost of banking, you need to be aware of it and if you dislike the charges, you can always switch banks.