Banking as a service

Filipinos of a certain age may still remember a time when banks competed for depositors by offering them savings accounts that could actually earn them some real interest.

Nowadays, the interest rates on ordinary savings accounts—almost all of them well below 1 percent a year—are so laughably low that given the rate of inflation, depositors might actually be paying the banks to hold their money.

Now one major bank has announced that starting next year, it will charge its clients for over-the-counter withdrawals and inter-regional deposits. These include:

• A P50 inter-region cash deposit fee (for transactions made at branches other than the depositor’s branch of account, and in another regions, such as Metro Manila to Ilocos);

• P100 inter-region withdrawal fee; and

• P100 fee for over-the-counter withdrawals of accounts with ATM cards.

The new fees were supposed to begin in September, but the bank later moved them to January to give “clients enough time to be more familiar with bank’s online and electronic channels.”

In the meantime, the bank said, it will impose new fees on check encashment (P100 if not done at a depositor’s branch of account), foreign currency deposits, and statement of account printing beginning in September.

Put plainly, starting next year, this bank will charge its customers for depositing money into their own savings accounts, if they do not do so in their home branch or a branch within their region.

They will also begin to charge their customers for withdrawing their own money over the counter.

The new fees seem designed to nudge customers away from branch transactions toward electronic or ATM transactions, but they do so in a way that penalizes them, rather than encourages them. The imposition of these fees also suggest a cavalier attitude toward their own depositors that disregards their banking preferences—some customers may actually prefer dealing with a live, human being when it comes to their hard-earned cash, than an automated teller machine or an app on a mobile phone.

The plan to actually charge people for depositing their money seems like arrogance of the highest order and violative of the basic concept of banking as a service.

Of course, depositors are free to move their money elsewhere, if they wish, but they should ascertain first if similar plans are not already underfoot, too, at the other banks they are considering. Given the non-existent competition for depositors in the industry, this is by no means a sure thing.

Perhaps it is time Congress examined the state of competition in the banking industry and ascertain why, as huge financial institutions prosper, small depositors are always put at a disadvantage, and how this eventually discourages the habit of saving.

Topics: Bank , Filipino , ATM transactions , Congress , Money , Editorial
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