Do you keep track of the balance in your bank account' If not, you may have to pay for your carelessness. ICICI Bank and UTI Bank have already increased service charges for customers who do not maintain a minimum average balance in their accounts during a particular quarter. More banks are expected to follow suit.
“Banks are in dire need of low-cost deposits to fund their credit growth. If a bank has a large number of customers who do not maintain a minimum balance, it means a higher cost of funds for the bank,” said a senior official of another private sector bank.
“Banks would like to pass on the increase in cost to the defaulters in the form of higher penalty charges,” he added. A customer of a private bank has to keep a minimum average balance of Rs 5,000 in a savings account and Rs 10,000 in a current account.
ICICI Bank slaps a penalty of Rs 750 every quarter for non-maintenance of the minimum average balance. UTI Bank will also charge Rs 750 from July this year instead of Rs 500 now.
Both banks have increased the fine on bounced cheques for customers who do not maintain the minimum balance. ICICI Bank has raised it to Rs 350 from Rs 200, while UTI Bank will charge Rs 350 against Rs 250 at present.
The banks have also doubled the ATM transaction charges for these defaulters to Rs 50 from Rs 25. Defaulters will also have to pay higher charges for an account statement and PIN regeneration. Many public sector banks raised their services charges last year. Punjab National Bank has increased its penalties for certain services, such as ECS return for insufficient fund, from February this year.
K.J. Udeshi, chairperson of the Banking Codes and Standards Board of India, said, “We will look into these practices during our field visits, which will begin next month.”