Public sector lender IDBI Bank on Wednesday waived all service charges on facilities like issuance of demand drafts, cheque books, credit or debit cards and ATM interchange, on all current and savings bank accounts (CASA), the first move by any bank.
This step is aimed at increasing the bank’s below industry-average CASA deposits and the bank expects to double its retail accounts to Rs. 1 crore in the next 12 months, IDBI Bank’s Executive Director and Group Head Retail Banking R.K. Bansal said.
“Between money that we charge and the relationship with customer, we found the latter to be more important. We will have to forego some costs,” its Chairman and Managing Director R.M. Malla told reporters, adding that there would be no impact on the bank’s cost to income ratio.
For covering the losses through this offering, the bank will focus more on other services like loan advisory and syndicating large corporate loans which earns a good fee.
The cheaper CASA deposit percentage of the bank currently stands at around 14 per cent, lower than the industry average of over 30 per cent. “With this, we plan to match up with the industry average. I cannot predict if it will happen in six months or a year,” Deputy Managing Director B.P. Singh said.
The waiver applies for all service charges currently charged by the bank, excluding the fee charged for cheque bouncing, Mr. Malla said.