Sneha Srivastava/Mint
Sneha Srivastava/Mint

DYK | Bank service charges are set to increase from 1 April

In November 2014, the Reserve Bank of India had asked banks to inform customers about the penalties

If you are a customer of a private bank, chances are that starting 1 April, you will have to pay more to avail services of the bank, and in terms of penalties.

The change

Most private banks, including ICICI Bank Ltd, HDFC Bank Ltd, Axis Bank and Kotak Mahindra Bank Ltd, are set to increase service charges and penalties for customers from 1 April. For instance, ICICI Bank will now levy 350 per month, up from 250, for metro and urban locations if your monthly average balance is above 5,000 but below 10,000. If your monthly average balance is less than 5,000, you will have to pay 450 per month, up from 350. The bank will also start charging for cash deposits at a branch. For instance, ICICI Bank customers will have to pay 5 per thousand deposited subject to a minimum of 150. Till now, there was no charge on the first cash deposit of a calendar month.

In case of HDFC Bank, for non-maintenance of minimum average monthly balance, if you are an urban customer, you will be charged between 150 and 600. Customers from semi-urban areas will be charged between 150 and 300 per month. The charges will vary depending on the type of account and the amount in the account. For instance, if your are an urban customer and your average monthly balance is less than 2,500, a charge of 600 per month will be levied, which earlier was 350. Also, HDFC Bank customers will have to pay 75 for additional cheque book of 25 leaves.

Axis Bank customers will have to pay 5 per 100 of shortfall in the average monthly balance requirement, or 350, whichever is lower, depending on the type of account. Kotak Mahindra Bank stated on its website that the charges for non-maintenance of average monthly balance will be increased from 250-400 per month to 300-500 depending on the type of account and the balance in the account.

Where is the information available?

In November 2014, the Reserve Bank of India had asked banks to inform customers about the penalties. Hence, in case of non-maintenance of minimum monthly average balance, your bank will notify you either through SMS, email or letter. Remember that the penalty will be applicable for all the months in which you fail to maintain the level. However, banks will give you a grace period of 30 days to meet the balance requirement. In case you still fail to maintain the balance, the charges will be levied.

As a customer of the bank, you are responsible for maintaining the correct information with the bank. This will include your updated email, mobile phone number and address so that you receive such notifications promptly. Since it is mandatory for all banks to publish service charges on their bank websites and branches, you will get the information at these locations as well.

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