The general price rise in the country, commonly known as inflation has not only dampened the growth prospects of the country but has also affected the common man or the ‘aam aadmi’. Along with high food inflation due to lack of storage facility, the common man has to bear the brunt of rising fuel prices. With the rains expected to be below normal due to the possibility of an ‘El-Nino’ effect, the chances of further rise in food inflation looks eminent. Also, any spike in the crude oil prices (the possibility which looks bleak right now) may further push up the petrol prices making the common man suffer.

To add to the woes of the common man, even banks off late have increased their charges on some of the transactions undertaken by the customers. Let us see some of the services provided by banks to their customers which would cost you more.

Minimum balance to be maintained: Gone are the days where you were mandated to maintain a minimum quarterly balance in your savings account in order to avoid a penalty charge. Instead some of the banks now require you to maintain a minimum monthly balance with amount of balance remaining unchanged. For instance, if you were mandated to maintain a minimum amount of Rs 10,000 in your account on a quarterly basis earlier, you will now be mandated to maintain the same amount on a monthly basis. Moreover the penalty for non-maintenance of a minimum amount has gone up too. Kotak Mahindra Bank has increased the charges for non-maintenance of quarterly balance to Rs 750 - Rs 1,000, depending on the percentage of balance, up from Rs 600 charged earlier. Some banks have shifted to a monthly system. From Rs 750 a quarter, the penalty for non-maintenance has increased to as high as Rs 350 a month.

Branch transactions: Instead of 12 branch transactions free in a quarter, most of the banks have now imposed a limit of 4 transactions in a month and all extra transactions have been made chargeable. Moreover the fee for the additional transactions has been hiked from Rs 50 - Rs 60 to Rs 75 - Rs 90.

Credit card charges: You may be charged for not using your credit card too. Standard Chartered Bank now levies a non-usage fee of Rs 250 if a credit card has not been used for a year. And if the card has not been swiped within the first three months of it being issued, you will have to pay Rs 250. Banks have initiated a charge on credit card reward point redemption too. Currently, Axis Bank levies a fee of Rs 30 for each of your redemption request, while Standard Chartered Bank has increased the reward handling charges to Rs 99 from Rs 50.

Along with all the above changes, banks have waived some of the charges too. Intercity clearing charges have been removed and mobile banking services are free. At present, both HDFC Bank and HSBC Bank, provide free balance enquiry at all branches. In case of HDFC Bank, if your account balance is Rs 50,000 or more, transactions like NEFT, RTGS, cheque deposit and fund transfer are free. Earlier, charges were deferred if you had a fixed deposit equivalent to the minimum balance.

Our view:

In our view customers should transact with banks in a more organised manner and should avoid multiple bank accounts. An even if one does have multiple bank accounts, care should be taken to maintain the required balance and keep the bank accounts in an active mode in order to preclude any any charges for not maintaining the same. Also, one needs to be vigilant about such charges levied and keep a copy of the list mailed to you by the bank. Thus while you open a new bank account, you need to give a thorough check on different fees and charges on different banking activities.

Do you think that the increase in charges for various banking transactions by banks is justified? Let us know your comments or post them on our our Facebook page / Twitter page.

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mahaadhevankalathy@yahoo.co.in Aug 17, 2012 Today all banks including public sector and the private sector are not transparent to customers. they are all keen to penalize the customer over the customer ignorance. This is seen in all the service sectors of all PSU and the private players. One big hope is, Our old smaller thief ( Public sector) is much better than the new organised Bigger thief ( Private sectors including MNC )
chbl@stud.uni-sb.de Jul 24, 2012 The following is a lteetr sent to my bank (Chase) one week before I closed my account:This lteetr is to notify you of my intention to close all my bank and credit accounts with your bank. This includes my Chase Total checking account, my Chase Plus savings account, my Amazon.com VISA (administered by Chase), and my Sony VISA (administered by Chase). In addition, I intend to sell all mutual funds in any retirement accounts that invest in your bank. I would like you to understand why I have decided to sever all financial ties with your bank. JPMorgan Chase has illegally foreclosed on mortgages held by members of the US military. JPMorgan Chose continues to gouge communities with interest swap deals costing cities hundreds of millions of dollars, has the greatest number of foreclosed homes as of 2010, and has reduced small business lending by 75% in the wake of a government bailout meant to spur lending. I believe that the actions of your bank are both disgraceful and despicable. .
shettar_4567@yahoo.co.in Jun 18, 2012 Operating costs  of all banks have gone up considerably. There is a need to cover those costs. There is a limit upto which interest on loans and advances can be increased.  Hence,  increasing the fees on non-loan, non-borrow accounts is more or less justified. The banks should ensure that persons in lower rung of economy are given "free" or 'highly subsidized'  access to banks' services. What is that 'lower rung' is to be defined by RBI. Sooner the better.
pradeep.garg@gmail.com Jun 18, 2012 Increase in various charges and introduction of new charges are not legally tenable in view of RBI Circular which is being misused by banks as no authority to check what they are doing.   Moreover, they are - not informing customers about the change  - not displaying in bold letters at the gate - not displaying their registered office address at the branch etc. - pressing hard even old customers Please help to take up the matter with RBI. HDFC Bank is one of the example. Banks are openly cheating customers with fala-fide intent as they do not communicate at all. Telecom operator like Vodafone airtel etc other service provider are in the same boat.
manoharkantak@gmail.com Jun 19, 2012 The banks have increased the number of branches to compete with each other. Today you have a bank at every five minute walking space, and in some areas cluster of banks. Many among them are not at all viable but to survive they come out with plenty of such taxing ideas. After some time they will have to merge with each other. The rent cost, employee cost other overheads and the limited business that they draw will force them to restructure their operations. This happens in spite of having the most qualified and experienced people. Not all branches are making profits.

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