Banks charge extra for deposit over 1000 notes

From now if you have to deposit a big amount in cash in the bank then be ready to pay extra. According to the new SBI rules, Rs 100 will be charged for every 1,000 notes, irrespective of denomination, over the limit of 1,000 notes.

Recently such incidence was reported when Madan Joshi, a scrap dealer at Howrah's Bajrang Market, got a rude shock when he went to deposit Rs 2,00,000 in cash - a routine he has been following several times a month for a long time in his account at the Belur branch of the State Bank of India. The cashier at the bank accepted the cash, but charged him Rs 200 for counting them, and this sound very unusual. "I was told that from now on, if I deposit such big amounts in cash, I will have to be prepared to pay extra. But why should this happen?" Joshi asked.

Joshi told, "I was told that I should make it a habit to pay in cheques if I have to avoid paying this extra counting charge from now on".

"I am extremely upset with the new system, as for businessmen like us, who need to withdraw and deposit cash all the time, it would mean losing a lot of money!" he was disappointed at this. Therefore if you are a businessman like Joshi and used to transact large amounts of cash across the counter, then be prepare to pay extra as banks have started levying charges on cash deposits in current accounts.

"If somebody deposits more than 1,000 notes of any denomination, then he has to pay handling charges," an SBI official said.

As per the his information few months back he received a circular from the SBI corporate centre on levying cash handling charges on cash deposits in current accounts. Giving details about the process, the official said that the bank does not levy charges up to 1,000 notes. So, if a customer deposits Rs 1 lakh with 1,000 notes of Rs 100, he does not have to pay any charges. But if the notes are of Rs 50 denomination, the depositor has to pay Rs 100 as counting charges.

"For each additional 1,000 notes over the specified limit will attract a charge of Rs 100. We generally do this to discourage huge cash transactions. The bank has to depute huge manpower for computation and supervision of fake notes. The counting machine can count notes but cannot differentiate between fake and soiled notes," he said.

The officials of Axis Bank and HDFC Bank also informed that they have started charging cash handling charges for current accounts. When it was inquired from a top RBI official he told that it has given some flexibility to the banks in the areas of cash handling and management a few months back. "The bank can levy cash handling charges if they want to do so. This is up to the bank," he added.

On Monday Credit card major SBI Cards & Payments Services Pvt Ltd (SBI Card) informed that its card issuance has come down to nearly a third of its peak monthly issuance of one lakh cards, which reflects the general downturn in the economy.

In India the non-banking finance company, which is a joint venture between the State Bank of India (SBI) and GE Money, is having a credit card base of over three million.

As per the information provided by Diwakar Gupta, CEO, SBI Card, the delinquency level for the industry averaged around 15 per cent and SBI Cards portfolio reflected this trend. Outstanding credit of SBI Card is around Rs 2,000 crore.

“We are seeking to build a quality portfolio. We are reaching out to card holders, who are having a good track record but are facing repayment difficulties due to the current economic downturn, with restructuring packages, which includes a softer Equated Monthly Installment option,” said Gupta on the sidelines of the launch of the ‘SBI Dena Bank Card’.

He said that the company, which has suffered a loss of Rs 150 crore in 2007-08, has been fast in dealing with delinquencies.

There has been increase in the cost of funds up to 14 per cent, earlier it was nine per cent levels, the card company recently has hiked the interest rate charged on outstanding credit rollover from 3.1 per cent to 3.35 per cent per month.

The CEO informed that on seeing the business requirement, SBI Card might require capital infusion next year, and further added that the company’s current capital adequacy ratio is over 11 per cent as against the regulatory minimum of 10 per cent.

While speaking during the launch of the SBI Dena Bank Card, Bhaskar Sen, Executive Director, Dena Bank, said the new credit card will have rich features and will be trustworthy offering for Dena Bank customers.

In addition to offering an attractive rewards program, the card, will also offer customers benefits like Flexipay — an easy installment plan where customers can choose the one best suited to their financial needs, and nil surcharge on purchase of fuel and lubricants at any petrol pump across India. The card has two variants --- gold and international.

SBI to be the sole loan provider for Nano cars

The State Bank of India (SBI) will be the only bank which will provide car loan to buy Nano, across the country. Tata Motors and State Bank of India (SBI) have got into a first-of-its-kind alliance for extending car loans to buyers for the world's cheapest car - Nano.

Nano dealers will accept only SBI cheques. Even the people who want to do payment in cash need to have to issue demand draft of SBI in favor of Tata Motors.

According to reliable sources the companies are having talks for finalizing the terms and conditions of the alliance but the formal announcement is likely to be made just before the first Nano rolls out from either Pantnagar or Pune.

Tata Motors sources said they want to utilize the vast network of SBI and its seven associate banks. SBI is having a branch network of around 11,000 branches. Moreover, its seven associate banks have a combined network of 2,000 branches.

Since the Nano is going to be a common man's car, therefore SBI with its associates has been considered to be the best fit for a product that has to get customers from rural India.

As Tata Motors have shifted its plant from Singur to Sanand, it has also enhanced its manufacturing capacity from 3 lakh car in a year to 5 lakh car a year.

As promised by the Tatas the Nano car will be rolled out by the last quarter of this year. The first car will be rolled out of the Tata plants in Pantnagar, Uttarakhand and Pune in Maharashtra.