Mumbai, February 3
In a bid to discourage cash transactions, the country's second largest private sector lender, HDFC Bank, has decided to steeply increase the fee for savings account holders on a slew of activities involving cash.
The move assumes significance as the government, post-demonetisation, has been encouraging people to shift to a cash-less or less-cash regime and use digital mode for transactions.
HDFC Bank has decided to raise the charges on certain transactions, capping cash component in others and also introducing charges on certain transactions from March 1, a bank official said today.
The city-headquartered bank has capped the third-party transactions at Rs 25,000 a day, reduced the number of free cash transactions at branches to four from five earlier and also raised the fee for non-free transactions by a steep 50 per cent to Rs 150, it said on its website.
Earlier, it used to allow cash transactions of up to Rs 50,000, both withdrawals and deposits per day, the official said, adding the review is only for salary and savings accounts.
The bank has also capped the free cash transactions, including deposits and withdrawals, at home branches at Rs 2 lakh, above which customers will have to pay a minimum of Rs 150 or Rs 5 per thousand.
For non-home branches, the free transaction is for only Rs 25,000 after which fees set in at the same level, he said.
It can be noted that a slower-than-expected fee income growth was one of the reasons which led the bank report its slowest quarterly profit growth in the past 18 years in the just concluded December quarter, when its bottomline growth slipped to 15 per cent, as a slew of charges were discontinued during the note ban.
The bank official said the review has been done to discourage usage of cash and push digital transactions, which have grown at a higher pace. The official claimed that the hiked charges are on a par with the industry trend.
Its larger peer ICICI Bank's website shows a minimum charge of Rs 150 for more than four cash transactions (deposits and withdrawals) at home branches for savings accounts, similar to what HDFC Bank is proposing.
Axis Bank, the third largest private lender, charges Rs 150, or Rs 5 per thousand, for cash deposits of over Rs 1 lakh per month or from the fifth withdrawal at branches, its website said.
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