Good-bye anywhere banking

Pvt banks to charge customers not using home branch

If you were sold on the idea that you were banking with a bank and not a particular branch, think again.

This concept of 'anywhere banking' is set to die as banks have started charging customers who choose to bank with branches other than their home branch.

Come January, depositing funds into ICICI Bank accounts at branches other than the account holder's home branch, will attract a transaction fee.

Private sector banks "" HDFC Bank, Global Trust Bank and IDBI Bank "" have put limits on the amounts one can withdraw or deposit at branches where the account is not maintained.

Withdrawals and deposits of up to Rs 50,000 per day do not attract any charge. However, sums beyond Rs 50,000 will require a fee varying between Rs 2.50-Rs 2.90 per Rs 1,000 withdrawn or deposited.

The ICICI Bank will levy an minimum fee of Rs 100 for every cash deposit into one's savings account at a branch other than where the account is maintained.

This private sector bank allows three free transactions every quarter, but levies a fee from the fourth transaction onwards, irrespective of the sum deposited.

"The idea is to plug the misuse of bank savings accounts being used as a current account," said ICICI Bank joint general manager R Muralidharan.

The ease and freedom anywhere banking affords "" having access to one's account or allowing access to one's account "" till recently came without a price.

Many traders have taken advantage of 'anywhere banking' by opening a savings account instead of a current account, as the latter attracts a larger minimum balance with no interest payable on balances.

Banks have seen how traders can get their associates sitting outside the city to deposit cash into their savings account, which they can then access immediately free of cost.

"More than 70 per cent of transactions are happening outside the branch, and more than 99 per cent of account holders do not deposit cash more than once a month, if at all," ICICI Bank officials said, rationalising the move.

But there are a host of account holders belonging to the older generation who are not comfortable with tele-banking, Internet banking or even using ATMs.

"Transactions on the Net work out 60-70 per cent cheaper for the bank, and this explains why banks are trying to migrate customers to use the technology platform with free offers of demand drafts, etc," said HDFC Bank officials.

HSBC, which also used to levy a fee for cash withdrawals from branches but has since stopped, said: "Today we levy no charges if a customer chooses to bank the traditional way. There is a pull factor to encourage him to migrate to other delivery channels, but no push factor."

Private sector bank officials add: "Traditional banking puts extra load on branches and the quality of service thereby suffers. Especially at a time when we are trying to promote cross-selling."

Foreign banks require a minimum quarterly balance between Rs 10,000-25,000, which help off set costs to a certain extent. Citibank on the other hand, introduced Suvidha, which essentially only allows access to remote banking.

Today, high value amounts being transacted through savings bank accounts is abusing the system. ICICI Bank's Muralidharan pointed out that with the introduction of real time gross settlement (RTGS), the abuse to the system might get partially resolved.

Said ICICI Bank officials, the abuse to the system is to such an extent that a deposit made at 9:00 am in the morning in Salem is withdrawn within half an hour in Mumbai as the depositor and account-holder converse over cell phones and synchronise the two transactions.

This is as opposed to the trader paying for a telegraphic transfer or a demand draft, which takes a day or so.