Who doesn't love cash? But your fascination for cash is going to cost you dearly. In a bid to discourage cash transactions, some private sector banks have steeply increased the fees for savings and salary account holders on a slew of activities involving cash.
Who doesn’t love cash? But your fascination for cash is going to cost you dearly. In a bid to discourage cash transactions, some private sector banks have steeply increased the fees for savings and salary account holders on a slew of activities involving cash.
According to a PTI report, some private banks including HDFC Bank, ICICI Bank and Axis Bank have started charging a minimum amount of Rs150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.
The charges would apply to savings as well as salary accounts effective Wednesday (March 1), HDFC Bank said in a circular. The bank would also cap the third-party cash transactions at Rs 25,000 per day, while cash-handling charges would be withdrawn effective Wednesday, the circular added. For the basic no-frills bank accounts, maximum four cash withdrawals would continue to remain free and there would be no fees for cash deposits.
In case of ICICI Bank, the charges are same as they were before the demonetisation move announced on 8 November, while there is an increase in such fees in case of some others. According to details on ICICI Bank website, there will be no charge for first four transactions a month in home branch while Rs 5 per thousand rupees would be charged thereafter subject to a minimum of Rs 150 in the same month. The third party limit would be Rs 50,000 per day, said the PTI report.
For non-home branches, ICICI Bank would not charge anything for first cash withdrawal of a calendar month and Rs 5 per thousand rupees thereafter, subject to a minimum of Rs 150. For anywhere cash deposit, ICICI Bank would charge Rs 5 per thousand rupees (subject to a minimum of 150) at branches, while deposit at ATMs would be free of charge for first cash deposit of a calendar month and Rs 5 per thousand thereafter.
ATM charges have also been re-introduced. At Axis Bank, the first five transactions or Rs10 lakh of cash deposits or withdrawals would be free and charged at Rs 5 per thousand rupees or Rs150, whichever is higher.
Whatever be the case, a majority of people think that the steep increase in charges on cash transactions is unjustified and must be withdrawn. Here we are taking a look at 5 such charges:
1. Reduction in number of free cash transactions
Some banks have reduced the number of free cash transactions at branches to four from five or more earlier. This will make people shell out more for cash transactions beyond the set limit.
2. Increase in charges
These banks have started charging a minimum amount of Rs150 per transaction for cash deposits and withdrawals beyond four free transactions in a month. Such charges were Rs 20 earlier.
3. Capping of third-party cash transactions
HDFC Bank and Axis Bank have capped the third-party cash transactions at Rs 25,000 per day as against Rs 50,000 earlier. In case of ICICI Bank, the third party limit is still Rs 50,000 per day.
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4. Cess and additional service tax
The HDFC Bank users will have to Rs 150 for every cash transaction after the four free ones and at the same time will have to pay cess and an additional service tax. If the account holder wishes to withdraw or deposit more than Rs 2 lakh in cash at the home branch of HDFC, he’ll be charged Rs 5 per thousand rupees or a minimum amount of Rs 150 (plus tax and cess). Thus, you will have to pay this cess and additional service tax apart from the cash-transaction charges.
5. Charges on cash transactions beyond set limit
HDFC Bank has also capped the free cash transactions at home branches, including deposits and withdrawals at 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 transactions are only Rs 25,000 after which fees set in at the same level.