There are various disadvantages of banking at a non-home bank branch. A home branch of a bank is where a customer opens her savings bank account. This account is basically attached to that branch, and all other branches of the same bank become non-home branches.
In fact, at the Connaught Place (New Delhi) branch of a state-run bank, non-home branch customers are made to stand outside the bank premises—whatever be the season—and can make transactions only through a small window.
At this and all other banks, non-home branch customers need to pay a ‘cash handling charge’ even for small cash transactions.
THE CHARGES
If any cash transaction, such as deposit or withdrawal, is done at a non-home branch, a fee is levied. This fee varies across banks. Also, some banks charge even if a third party makes a cash transaction.
Apart from this, there is a limit to the amount of cash transaction that can be conducted at non-home branches. For instance, ICICI Bank Ltd charges Rs.5 per Rs.5,000-transaction, and a minimum of Rs.150 after the first free non-home bank transactions for the month. Also, the maximum a person can self-transact in a day in non-home branch is capped at Rs.50,000, and at Rs.15,000 for third-party transactions.
Some banks have capped the number of free cash transactions each month even at home branches.
THE GENESIS
On 1 July 2013, the Reserve Bank of India (RBI) had issued a circular that it had observed banks discriminating against customers in the name of non-home charges. Also, given that banks have moved to core banking solutions, this seemed unreasonable. In view of the circular, banks started charging in the name of cash handling charges.
IS IT JUSTIFIED?
In a paper called A Myth called ‘Any Branch Banking’-Service Charge Discrimination, professor Ashish Das of the Indian Institute of Technology-Bombay, observed that to ensure fair treatment of bank customers at all branches of banks/service delivery locations, RBI should mandate banks to follow a uniform, fair, transparent and non-discriminatory pricing policy for customers at home and non-home branches.
However, till the central bank acts, customers will have to pay these cash transaction charges. What’s more, free transactions at automated teller machines (ATMs) have also been capped for users in both metro and non-metro cities.
