IDBI Bank on Wednesday waived off all service charges on current and savings accounts (casa), the first of a kind by any bank.

The bank said it would also look at waiving off charges for other services, such as lockers and demat accounts.

The waiver applies to all service charges at present levied by the bank, excluding the fee charged for cheque bouncing. The bank will also bear the ATM (automated teller machines) interchange fee paid to other banks for transaction at their machines, RM Malla, chairman and managing director of IDBI Bank, said.

This will allow IDBI customers to use any ATM as many times as they want without worrying about paying any fees, he said.

“Between the money that we levy and the relationship with the customer, we found the latter to be more important. We will have to forego some costs,” said Malla. At present, customers are paying for every service provided by banks, and the service charges differ from bank to bank.

An IDBI official said these services constitute a significant component of banks’ fee or non-interest incomes and it would be difficult for other banks to follow suit.

For covering the loss through this offering, the bank will focus more on other services such as syndicating large corporate loans. The cheaper casa deposit percentage of the bank stands at around 14 per cent at present, lower than the industry average of over 30 per cent. The bank is looking at increasing its casa deposit to 20-22 per cent by end of the present financial year.

The bank also expects to double its retail accounts to 1 crore over the next one year.

IDBI Bank plans to add another 250 branches to its present 750 within the next 12 months and increase its ATM network by opening 500 more ATMs this year.

shrutiverma

@mydigitalfc.com