you are here: HomeNewsBusiness
Last Updated : Nov 03, 2020 05:01 PM IST | Source: Moneycontrol.com

BoB, ICICI Bank announce fees for certain cash transactions; more may follow

Many banks have been charging customers for certain cash transactions in the past as well. But, these charges have been tweaked now

Some of the large commercial banks have introduced or tweaked convenience fees on certain cash transactions from November 1. Two banks - Bank of Baroda (BoB) and ICICI Bank - have made announcements that essentially say that they will now levy a fee or hike existing fees that will be charged to customers for certain type of cash transactions.

BoB has said it will levy a higher cash handling charges for cash transactions beyond certain limits - a minimum Rs 50 and a maximum Rs 20,000, the bank said on its website. Earlier, BoB, used to charge a minimum of Rs 10 and maximum of Rs 10,000 for certain kind of cash deposits.

Further, for cash deposits, beyond first three transactions a month, the bank will now charge Rs 50 per transaction. Earlier, this charge was not applicable for first five transactions. Similarly, beyond first three transactions, the bank will charge Rs 150 per transactions.

Close

Similarly, ICICI Bank too has said it will charge a convenience fee of Rs 50 per transaction from customers for cash deposits at ATMs during non-business hours and bank holidays. Customers will be charged for every such transaction done on bank holidays and between 6:00 pm and 8:00 am on working days.

"Effective November 1, 2020, a convenience fee of Rs 50 per transaction, will be levied on cash deposited in the cash acceptor or recycler machines on bank holidays and between 6:00 pm and 8:00 am on working days," ICICI Bank said.

An ICICI Bank official, who requested anonymity, said the charges are applicable only when a customer deposits money at a cash acceptor machine at a branch beyond banking hours. “That too, no fees are charged till the customer deposits Rs 10,000,” the official added.

Are these charges within the rules?

An RBI official, who didn’t want to be named, said these charges need to be seen in perspective, but said the charges cannot be too high.

“Banks are commercial entities. They have to recover their cost of providing services and facilities. The charges cannot be usurious,” said the official. “For additional banking services like cash handling, on non-bank holidays, through their machines, they may charge a certain amount, which may vary from bank to bank,” said the official.

However, for basic banking services, there are not such charges, the official said, adding that the RBI hasn’t made any announcements on the matter.

Not new

To be sure, banks have been already charging from customers for certain transactions beyond specified limits. These banks have probably hiked those charges now.

Why are banks doing this? This could be probably to discourage customers to do more cash-based transactions and also to generate some fee income in the process.

The decision on cash handling charges are upto each bank. “Hence the customers need to check with their respective banks to understand the fee structure,” said another banker who too didn’t want to be named.

With BoB and ICICI Bank making announcements on fees imposed on cash transactions, more banks may follow the suit.
First Published on Nov 2, 2020 08:38 pm
Sections