Banking without Charges?

Surprise! Surprise! Surprise! – An announcement from a IDBI Bank has taken me by surprise.

IDBI Bank has decided that henceforth it’s savings account & current account holders will not incur any charges other than Cheque Return Charges. This is surprising given that the bank used to charge for online NEFT fund transfers also even for it’s premier customers.

The aim of this move is to improve the share of CASA deposits from around 15% to at least the industry average of 30% or more. IDBI Bank seems to have the least ratio of CASA deposits among banks.

So now will this move help in attracting public to open accounts in IDBI Bank and park more money there? Answer to this question will be seen over the next year or two.

My option is that though this may attract people to the bank esp. people living around the branches but they will be put of by the pathetic customer service the bank has (I have been an a/c holder of the bank for almost 10years now and have suffered a lot due to the pathetic customer service at the branch – I have in fact cut down on the transactions with the bank to the minimum).

Another fact to be seen is will all the charges be cut or some will still remain. The news report says all charges except Cheque Return Charges but a clear picture will come out when they release the schedule of charges on their website – currently they have remove the charges schedule for all types of accounts.

Also another thing to watch out is how will they differentiate between various types of accounts now given that all will have similar charges now – ZERO  CHARGES. The differentiation will need to happen on product offerings like AT PAR CHEQUE CLEARING for premier a/c holders.

A major point in the news was that failure to maintain minimum balance will not attract any charges… So I can signup for the PREMIER A/c and maintain balance for the basic a/c?

Awaiting clarity on such product features. Will update as soon as the details are published.