There was outrage on social media on how Indian banks are turning into vampires. State Bank of India announced penalties for customers breaching average minimum balance limit in their accounts last month. This issue become social media storm, but the dust it raised is yet to settle.
In the battle for fees, banks should realise that maximising profits is a short-term game and a fair game could sow the seeds of long-term profits.
Banks aren’t feeling the pinch of customer bitterness yet, but it has drawn the attention of the Reserve Bank of India and the government has got into the act as well. This is probably a strange case where the government is on the same side as the consumer. The digital-obsessed state doesn’t want to fritter away the tax compliance benefits from demonetisation. Banks, the essential channel to execute the vision, are looking to extract their pound of flesh.
Consumers believe that banks are taking them for a ride with charges even as banks’ mainstay is their deposits. There’s another stakeholder too – the vendors who supply technology and make many services possible.