Dent in your balance

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SummaryThrow caution to the winds and your bank could charge for services you thought were free

Banks have put in place strict regulations to protect the interests of customers. However, if a customer does not adhere to certain provisions, he could be levied a hefty penalty as well.

Withdrawing over minimum balance

Although some banks do provide the option of a zero-balance savings bank account, there are many private lenders that require customers to hold a quarterly balance of R10,000. If the customer fails to maintain the minimum balance in the account, a fine is levied on it. The quarterly balance system can be slightly tricky; sometimes, without a customer even realising it, he might end up not maintaining the requisite average balance. It is, therefore, advisable to leave the requisite minimum balance for a fair number of days so that it gets adjusted with the quarterly balance.

Using non-bank ATMs

As per RBI norms, a maximum of five transactions from non-bank ATMs are allowed every month. If you exceed this number, you will end up paying a fee for it. The transactions could be withdrawing cash, checking balances or even changing ATM PIN. Earlier, this rule was applicable to cash withdrawal only. The charges levied for cash transaction are R20 and for R9 for non-cash transaction if the customer exceeds the limit of five transactions a month.

Overlooking bank notices

Most banks send quarterly account statements, overdraft notices and other correspondences by mail. It is normal to either throw these mails away or just put them away somewhere. The account statements are required for many purposes such as applying for housing loans, address proof, etc. Banks levy charges for issuing duplicate statements and although this can be done over the phone, it is a time-consuming process. Of course, for those who use online banking, they can simply take printouts of the account statement. However, a lot of necessary notice arrives from banks, which also include lucrative offers that a person must not simply discard.

Updating personal details

Updating personal information, such as address and phone number, is a tedious process as the new details have to be submitted with relevant proof and an application form at the bank branch. Some banks do offer this facility online as well. Some allow customers to change their phone numbers from the ATM, but public sector banks do not offer such conveniences. However, procrastinating in this matter can lead to a lot of problems since you will miss out on bank correspondences and your information may land in the wrong hands, resulting in privacy breach or frauds.

Returned cheque

If a cheque issued by the customer is not honoured (bounces) and is returned to the bank, a penalty is charged by the bank. The fine will depend on the nature of cheque dishonour. If the cheque is dishonoured due to insufficient balance, the penalty is higher and, if a third person had issued a cheque in the customer’s name but it bounces due to insufficient funds, a lower penalty is levied on the customer. The penalty amount can vary from R50 to R750. In many cases, cheque dishonour may also result in criminal cases; hence, it is always advisable to issue a cheque only after checking the bank balance.

Stop payment

If you make a stop-payment request against an issued cheque, the bank will levy charges that could be very high. Some banks do not levy such charges in case of online requests; however, the charges will be levied if you visit the branch.

ATM PIN request

If you misplace or forget your current ATM PIN or it expires as you did not use your card within the stipulated time, the bank will levy charges for issuing a new PIN. There are no charges levied for changing the PIN at an ATM. However, issue of new PIN may take up to one week and will incur maximum charges of R50.

If you close a bank account within six months to one year of opening, account closure charges will be levied by the bank. Bank charges are easy to avoid if one operates their bank account with prudence. Most of the charges are avoidable if we review your account regularly.

The writer is CEO, BankBazaar.com

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