Do They Practise As They Say?
This has significantly increased the cost of funds for banks. At the same time, technology and competition have made hitherto premium products a standard feature now – for example, fixed deposits linked to savings products. High earnings from distributing insurance products have already petered out and threaten to decrease if banks are forced to become brokers.
So, yes, for banks to maintain higher levels of service, it is expected that they will bring service charges in line with the increase in costs. Banks have been given the freedom to fix service charges for banking transactions, which includes incidental charges for issue of bank drafts, with the approval of their boards. While fixing service charges, they should ensure that the charges are reasonable and not out of line with the average cost of providing these services. In order to ensure transparency, banks are required to display and update on their websites the details of various service charges in a prescribed format. Simultaneously, it is important that they review the fairness and efficiency of their customer service and make improvements as needed.
Coming to the crux of the problem, are banks’ service charges uniform? Is the language straight and clear in the description of the charges levied? Why do different banks use different terminology for the same service – for example, convenience fee, cancellation charges, or just service charges?
There is a general feeling among bank customers that service charges rules are more for theoretical purposes and hardly abided by. While conducting this study, we came across many inconsistencies between theory and practice in certain banks. This is despite bank branches being linked through centralized