On May 3, along with the announcement of hike in the policy rates by 50 basis points, The Reserve Bank of India also hiked the interest rate on the saving accounts that were unchanged since 1993 at 3.5 percent per annum to 4 percent.
The increase in the interest rate will put an extra burden on the banks and that is why to stabilize the burden banks are likely to increase the transaction charges fro the services they offer and cal also start charging on the service that were free.
The Managing Director of HDFC Bank Mr. Aditya Puri said "The transaction charges will go up for the consumers if the rates on savings bank accounts keep on going up... The banks also have to survive."
Increase of minimum balance in the account, increase in the cheque issue charges are a few possible improvements that the banks are considering post hike in the saving bank account interest rates.