The race has started for revision of Service Charges in CASA accounts, after the freeing of SB interest rates by RBI.
HDFC Bank has taken the lead in this race, and other Banks will follow suit.
The pricing of Service Charges is the sole prerogative of the respective bank, and the service charges are revised, looking at the bottom-line and peers.
In future, if complaints pile at regulatory bodies i.e RBI, Banking Ombudsman, BCSBI, than Service Charges regulation might become a reality.
To avoid such a situation, Banks can choose to adhere to common norms across all banks.
The best body to lead would be the Indian Banks Association (IBA).
The following points would reduce the customer complaints and the need for regulatory interface.
The Pros and Cons of each point will be explained in later Posts.
01) Service Charges to be revised industry wise, by all banks on a common dates. (Minimum norm – once in 3 months. The common dates can be 01/04, 01/07,01/10,01 every year)
02) Components of Service Charges to be common for all Banks. The amounts might vary from Bank to Bank / Product to Product.
03) On revision of Service Charges, if the customers’ desire to close their accounts, within 15 days of such revision, no penal charges to be levied.
04) Customer’s Acceptance for the applicable Service Charges to be on record, with the account opening form.
05) While calculating Average Balances, the Charges debited to the account should be included.
06) The periodical account statement should contain the break-up of the Service Charges charged during the Account Statement period.
07) SMS Alerts for financial as well as non-financial updates in the account.
09) Option to set up Card wise limits for ATM/POS transactions.
10) Option to set up limits for Mobile/Internet banking facilities.
11) Nomination facility for Deposits opened via Mobile/Internet Banking.
12) Complete Statement of Account to be provided at the time of closure of account.
13) In case a bank account is opened as incidental to other bank services i.e disbursement of Loan etc, no Average Balance to be insisted.
14) In case, charges are to levied for Branch Transactions, Tokens to be issued with time-stamp. This will aid in monitoring the service levels are within the time-lines, for that particular transaction.
15) In case of change in classification of account i.e Salary account to non-salary account, no penalty to be levied, if account closed within 3 months of the change. Information to customer regarding change in classification of account and the applicable service charges in the Saving Bank account.
16) A comparison tool to be made available on the Self-regulator’s website.