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OPINION

Know your service charges

Banks have responsibility to inform customers about these charges
Sajjad Bazaz
Srinagar | Posted : Mar 14 2018 1:18AM | Updated: Mar 13 2018 11:37PM
Know your service charges
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Banking operations have undergone a sea change. Integration of technology into the core banking operations has helped the banks to provide a series of services to their customers, anywhere and anytime. The customers, most of the times, are not required to visit bank branches as the banks have facilitated them with online transaction facilities. Bringing banking products and services at the doorstep of customers has been possible when banks made (and are still making) huge investment in technology. 

Precisely, this technology integration has paved way for wonderful services that we see today: internet banking, mobile banking, swift transfer of funds anywhere in the world, credit cards, debit cards etc. With these kinds of facilities, service charges or transaction fees are unavoidable. Of course, such charges/fees has to be reasonable in line with the facilities a bank customer is availing.

But, for quite some time now, bank customers have been vomiting anger on social media against such services charges/ transaction fees. Notably, in line with the Reserve Bank of India (RBI) directions, all banks have kept this schedule available for general public on their websites.

Here it makes a sense to make you aware about some bank charges that all of you should know about. 

You are required to maintain average balance in your account. It is the minimum amount that is to be maintained in the account. Some banks calculate it on quarterly basis, while some have moved to monthly system. Here it's important for you to check with your bank about the periodicity of the average minimum balance requirement. If you fail to maintain it, the bank would be deducting charges from your account as penalty.

Obtaining a duplicate account statement also attracts charges. Here you have a choice to cut down these kind of charges. Take route of digital services to obtain your duplicate account statement. The banks will give you 50% or above rebate in such charges. 

Banks also charge you for  dishonoured cheques. If a cheque which is drawn on bank or deposited with bank is returned for want of funds or any other valid reason, the bank would be deducting charges for the 'dishonoured cheque'. The charges differ from bank to bank.

Don't be surprised if your bank charges you for cash transactions. There are banks who would charge you for making unlimited cash deposits or even withdrawals. Besides, there is also a fee charged to a bank customer, if he/she conducts transactions at home as well as non - home (other banks') ATMs beyond the threshold limit of such transactions per month.

You must remember that you debit card is not free from charges. These charges, which are annual in nature, are deducted immediately after the card is issued. If the card is lost or damaged, you will have to pay additional charges for the new one.

Using electronic mode of funds transfer like National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) too attracts charges. International transactions cost a few percents more because of the currency conversion charge. If you make payments abroad through debit or credit card, a charge of varying from bank to bank is added to the exchange rate

Swiping a debit or credit card at a petrol pump attracts the amount of surcharge. The charges vary from bank to bank. However, some banks offer you a cash-back in partnership with oil marketing companies.

SMS alert service is one of the best things that has happened entirely to the benefit of the accountholder. Now banks charge for the balance updates they send on cell phones. Some banks charge on quarter basis for the service, while some levy charges after the accountholder crosses threshold limit of free SMS alerts.

I have seen lot of bank accountholders  leaving their accounts unused. Over a period of time, these unused accounts fall below the minimum amount balance limit. Once it happens, the bank starts deducting charges. At one point of time, the entire balance of your account can be wiped out. So don't leave your account inactive and simultaneously ensure your minimum balance in the account is in line with the norms to avoid charges' deduction. It is better to close the unused accounts.

In today's digital age, make best use of online transaction facilities. Avoid writing a cheque as much as possible. You may get some cheque leaves free of cost, buit after crossing threshold limit you will have to pay for each cheque leave.

While enjoying technology driven services which are entirely based on personal identification number (PIN)/password and user name system, ensure to be alert. Remember your PIN, passwords and usernames. Otherwise, every time you have to pay a fee for their regeneration. 

(The views are of the author and not that of the institution he works for)

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