Banks have started raising the charges of fee-based products to keep the end result growing. Banks are raising fees of usage of ATM & credit card facility, locker services, demand draft (DD), cheque issue and internet banking facilities. Banks are raising charges fearing about slowdown in growth and profitability due to high borrowing costs.
ICICI bank country’s largest private sector lender and Bank of India (BoI) public sector lender have already raised the rates of some of these products and it is being expected that sooner other banks will be following them. For some of these products the fees has been increased by up to 50%, while many free services will now become charged services. You may get details of updated rates for ICICI home loan here and also all the important documents needed to get approval fast.
ICICI bank official said, “We have to raise the charges to keep up with the quality of services we provide”. Official said the hike will be applicable for both — Indian and NRI customers.
The charges raised for the services by ICICI Bank include issuing of cheque books, demand draft and cheque collecting facilities while increasing the penalty for return of cheque due to financial or non-financial (technical) reasons. From now consumers will have to pay for even irresponsible use of their debit card as ICICI Bank will be slapping a penalty if there is rejection of transaction at any ATM.
Bank will be also charging Rs 100 as penalty for de-hotlisting of cards (getting the card unblocked). On premature closure of an account, it will be charging a fine of Rs 500 instead of the previous charge of Rs 250. Bank will be taking charges from consumers for issuing of new user-ID and PIN for internet banking usage.
On the other hand Bank of India has revised the locker charges in addition to the charges for other services. “We have revised the service charges with effect from August 14 and the details will be available soon,” Bank of India CMD T Narayanswamy told ET. He added that the fees has been raised selectively and not “across the board.”
Commercial banks are making efforts to maintain their profits, after the recent hikes in key policy rates by RBI. The net interest margins (NIM) is falling down due to high cost of borrowing. Due to this increasing pressure, most of the banks have reported a single-digit growth in net profit for the first quarter of the current fiscal. It is being considered the high rate scenario is going to persist as there are no chances of RBI to relax the monetary measures in the near future.