Private banks to charge Rs150 per cash transactions after four per month
02 March 2017
Private sector banks such as HDFC, ICICI and Axis Bank have reintroduced transaction fees on cash withdrawals and deposits from 1 March, and have fixed limits for free transactions at four a month, in a bid to discourage cash transactions.
The banks have notified their respective account holders of a transactional fee, which will be applicable on the fifth transaction in a month.
After an account holder makes four cash transactions, the fifth one will be subject to a fee, regardless of whether it is withdrawal or deposit, banks said.
However, the fee will not apply to ATM withdrawals.
Banks have proposed that a service tax will be added to the Rs150 transaction fee, in addition to a fee of Rs5 per Rs1,000. Banks have also placed a Rs2-lakh cap on cash transactions per account per month.
Any transaction beyond this will be subject to an extra charge.
While Axis Bank and ICICI Bank returned to their pre-demonetisation charges, HDFC Bank has increased some fees.
HDFC Bank has reduced the number of free cash transactions at branches to four from five earlier and raised the fee for non-free transactions to Rs150 from Rs100 earlier.
"Four free cash transactions per month. Fifth transaction onwards Rs150 per transaction (plus taxes and cess) would be levied," HDFC Bank said in a statement.
ICICI Bank has already been levying a similar fee since July last year on cash transactions beyond five.
"It is nil for the first four transactions in a month. Thereafter Rs5 per Rs1,000 or part thereof, subject to a minimum of Rs150 in the same month. Maximum limit is nil for self but Rs50,000 per day for third party," according to the list of ICICI bank transaction charges.