How Banks are Surviving Post De-monetization? #HDFC_Bank_Doesn’t Care

Never thought of writing a negative post on this blog but sometimes your patience is tested so many times that you are left with no option than to use the power of pen or the keys in the modern context.

Unhappy over HDFC Bank on several fronts but before I come to this, I would just like to give a general idea of how the banking system in India is under pressure.

Post demonetization,  even the television channels were exaggerating of how so much money came into the banking system. However, nobody seems to have worked about the immediate consequences. Banks make the profit on loans which they provide through the cash deposited with them. In short, they pay less interest on deposits and get more interest on loans and this is how banks work and everybody knows this.

However, post demonetization banks got these huge deposits and they had to pay interest on these. Even though they were capable of creating some demand in loans, a larger portion is still unutilized. This created pressure on banks to meet their ends meet or in short to survive in business. They started charging customers for petty sums which they thought the customer would ignore. Example charges from checkbooks, IMPS, NEFT, ATM withdrawals, Credit cards, swipe machines, higher foreclosure rates etc. Moreover, they even started charging customers a quarterly service charge.  While this might not be illegal, this is certainly unethical and immoral and counter-productive in the long run. Some banks charged less while other charged more. Nationalized banks usually charged less for these services.

Regarding my personal experience with HDFC Bank, they charged me low usage charges on Swipe machine. Instead of the agreed Rs.400, they charged Rs.600 for several months and then Rs.1200 for a couple of months without any intimation.

Secondly, regarding the foreign remittances, I have seen they charge more compared to nationalized banks. i.e. they provide less conversion rate. The charges are double of what one pays in nationalized banks. I do agree that technical capability and user experience of these private banks in terms of quality website and better apps and security is better than nationalized banks. But still charging double is not justified, charging 20-25% over nationalized banks is justifiable.

Thirdly, HDFC bank deals with customers in two different ways. When you go to take a loan from them and if you have good credit score, they will treat you like a King (read Bakra in Hindi). While if you visit them to pre-pay your loan in advance, you are very unwelcome to do it. In fact, they charge a whopping 4.7%+ to foreclose a business loan account. Imagine this when you are paying interest at the rate of 16% and more for over a year and then they are asking you to pay this 5% for foreclosure. I asked the concerned person at HDFC whether there is any scope for reducing the foreclosure charges to which the reply was “No, and even if it’s reduced, it will affect your credit score”. Imagine, pre-paying your loan affecting your credit score negatively, lol. I do understand that banks make a loss on pre-projected income while making a foreclosure but anything above 2% is surely unethical and immoral even if not illegal. At least banks should consider some exemption on a case by case basis taking into account the total benefit the bank got from the customer.

If I had already paid around Rs.80K+ in last 15 months as interest at a whooping flat 16% when the RBI has time and again reduced the rates, why can’t the bank give an exemption of around 2.7% and bring down the foreclosure charges to 2%?? It’s not asking much for sure.

Have just tweeted about this and I hope somebody from HDFC bank will reply the usual automated kind of reply to write to with token id #XXXXXXXXX. Just waiting to get that, so that I can write an email.

I am certainly unhappy and I have informed my unhappiness to the local HDFC branch in Latur.  For a little inconvenience, if I am getting better financial benefit in nationalized banks, I think its time for me and the general public to rethink about this post seriously and make a calculated decision.

(to be continued)

If somebody from HDFC Bank wants to get in touch with me, I can be contacted at



Leave a Reply

Your email address will not be published. Required fields are marked *