All major private banks like ICICI Bank, HDFC Bank, Axis Bank, Yes Bank and Kotak Mahindra Bank have decided to increase service charges and penalties. These new charges and penalties will be applicable from 1st April, 2015.
The increased service charges and fines are mostly related to non-maintenance of Average Monthly Balance (AMB) requirement, cash deposits at Bank branches and Cheque book requests.
Last Year in November, The Reserve Bank of India (RBI) had asked banks to impose a penalty which would be proportionate to the shortfall in minimum balance from 1st April. The charge for non-maintenance of average minimum quarterly balance is the most widely applied charge by banks. If there is a reduction in this, it will have a major impact on the bank’s bottom line.
As of now, the penalty is uniform whether the shortfall is Rs 100 or Rs 5,000. Now with proportional charges, there will be a reduction in overall income which banks are trying to compensate by revising charges.
Example : Axis bank currently charges a penalty of Rs 250 per month (metro bank customer) for non-maintenance of minimum balance, irrespective of the quantum of the shortfall. From 1st April 2015, Axis bank is going to charge Rs 5 per Rs 100 of the shortfall from Average Monthly balance requirement (or) Rs 350 whichever is lower.
With effect from April 1, in the event of non-maintenance of minimum balance threshold, your bank has to notify you by SMS/e-mail/ letter. You will be then given 30 days of grace period to restore / meet minimum balance requirement. If you fail to meet the Savings account balance requirement, charges for non-maintenance of minimum balance will be applicable.
ICICI Bank – Service Charges & Penalties
ICICI bank will levy service charges on the cash deposits made by the customers or the customer representatives at branches not in the city where the account is opened. W.e.f. 1st April 2015, the new fee structure is as follows;
At Branch – Rs. 5 per thousand rupees or part thereof, subject to a minimum of 150 (Maximum deposit limit for Self: Any Amount & Maximum deposit limit – Third party: Rs. 50,000 per day)
At Cash Acceptance Machine – Nil, for the first cash deposit of a calendar month; thereafter in the month, Rs. 5 per thousand rupees or part thereof, subject to a minimum of Rs. 150.
Service Charges & Fees on Regular Savings Account – Click here.
For All other Savings Accounts – Click here.
Service charges for Current Account Products – Click here.
HDFC Bank – Service Charges & Penalties
HDFC bank has increased its penalty charges for non maintenance of minimum average Monthly balance in the range of Rs 150 to Rs 600 depending on the type of account and balance in urban areas. For semi-urban areas the new charges are in the range of Rs 150 to Rs 300. (For metro customers the AMB is Rs 10,000 & semi-urban customers it is Rs 5,000)
The bank will also charge Rs 75 for every 25-page cheque book beyond the first.
Axis Bank – Service Charges & Penalties
For details on Service charges, click here..
Kotak Mahindra Bank – Service Charges & Penalties
Download complete list of charges applicable to Savings Accounts.
Yes Bank – Service Charges & Penalties
Click here for more details..
Though RBI has cut key rates, most of the banks are yet to reduce their lending rates. In addition to this, the decision by private bankers to increase service charges and penalties will surely pinch the bank customers. It’s a significant double–
It’s high time that we close the unwanted / dormant bank accounts. It is advisable to check the latest fee list before placing any service request with the private banker.
(The above charges may or may not be applicable for salary account/privilege accounts) (Image courtesy of Stuart Miles at FreeDigitalPhotos.net)
If we don’t act now and penal charge is still apply than what resp organisation do to victim
I too have similar experience from hdfc. Their customer service is crap. What you have to do is give a direct complaint to the manager of concerned branch. You will get your money back. They may not simply let you to give a written complaint., they will try their maximum to avoid a written complaint. That was my experience.
Dear,
I have an HDFC salary account and it converted to savings account.Due to lack of minimum balance, they are SMSing about penal charges and now its about 5000/-.How can I avoid it.
Dear Ahammed..it is better you talk to your banker at the earliest.
Thank you for posting… I really got to work on closing my dormant accounts…
Dear Sathish,
As of now, Banks can not levy any charges for non-maintenance of minimum balance in dormant accounts. But, you never know, this may also change in future. It is better to close the accounts you do not need.
But when you activate your dormant account bank will charge all amount of not maintaining minimum balance. It means you have to pay your old dues on dormant account. Its better to close any dormant account.
Dear Shunny,
It is always better to close unused / unwanted bank accounts.
I am not sure if banks can ask for old dues if we activate savings accounts. Could you please share some reliable links on this topic?
Hi chowudary rs,
Firstly, If you are investing in these two accounts just to save your tax, then you wont be getting any additional tax benefit. Your tax exemption will be (PPF+SSY)= 1.5 lakhs. i.e if you are looking for tax exemption then going for both with 1.5 lakhs investment respectively wont help you
Secondly, If you are just looking for investments then you can go for ppf and ssy together. There are no restriction for it. Also as we are into financial planning, we will advice you to go for mutual funds which will offer much better returns than SSY if you want to save for your daughter.
Dear sir,
please clarify my doubt.
i am investing 1.5 laks in my PPF account. i want to open SSY account to my daughter as iam gaurdian . so i want to invest 1.5 lkhs in SSY account too. my doubt is – is there any restriction for investment i.e., PPF & SSY as iam only holding two accounts.
Thanks in advance
Dear Chowudary,
I agree with ‘moneyfrog’ views.