Banks are fleecing customers to shore up their profits and offset the dead weight of bad loans to corporates.
When the GST era dawned this month, online jokesters quipped that it was the most inscrutable thing after Duckworth Lewis. But paradoxically, it may have brought a disquieting clarity to another zone of universal experience. Amid the flurry of news reports detailing what would entail a higher tax of 18 per cent, there was the list of banking services. It read like a death roll: withdrawals, deposits, ATM transactions, ordering fresh cheque books, drafts, loan processing, locker charges, NEFT, SMS alerts, what not.
That’s when a lot of people realised what had already crept up on them: beginning this March, without much of a noise, banks had significantly hiked service charges on a range of things, and imposed new ones—like the charges for withdrawals and deposits after a prescribed free number. Trapped without anyone realising it, India’s vast bank customer base—all hundreds of millions of them—were already bleeding from a thousand small cuts.
Some folks, especially those engaged in business and therefore acutely aware of margins, had started feeling it. For Pasha, who has a fish business in Indirapuram near Delhi, the increased bank charges hit like a bolt. He has to withdraw money two to three times every week to pick up his supplies. After four withdrawals from his savings account, his bank charges him a minimum Rs 150 plus tax for each subsequent withdrawal. The number four is illusory too, for each act of deposit or withdrawal counts as one. The corollary: he has had to increase the price of fish to offset the damages.
Another cost-savvy customer, Mani Shekhar Jha, runs his own business in Old Delhi’s Sadar Bazaar, for which he needs to withdraw money several times in a month. Imagine just nine or 10 extra withdrawals each month, at even Rs 50 plus tax each time. His annual outgo on bank charges, he calculates, will be around Rs 6,000-7,000 at this rate.
This story is from the July 31, 2017 edition of Outlook.
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This story is from the July 31, 2017 edition of Outlook.
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