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Cut costs by banking online
Find
out how Net banking will not only help you save on time, effort and money,
but also result in several indirect gains.
Did you
know that approaching a bank branch to get a duplicate account statement
can cost you around 100, while the same could be had at half the price
through online banking? Similarly, a stop payment request that costs
upwards of 50 through traditional banking channels is a free service for
those who opt for Net banking. There are many other banking services where
you can save money by opting for Net banking (see table). However, most
people, especially those who prefer branch banking, don’t even realise they
are paying for these services or that their costs are adding up unless they
peruse their quarterly bank statements carefully.
Why is Net banking cheaper?
According to Ram Sangapure, general manager, Central Bank of India,
facilities like online and mobile banking drastically cut down the cost of
providing a service. This saving is passed on to customers who are willing
to go beyond the traditional banking channels. “A bank branch has to employ
people, incur cost for stationery and in setting up the office. Moreover,
paperwork eats up valuable man hours. If the customer uses the online
option, a bank hardly incurs any cost, which benefits the former,” he adds.
According to industry experts, a bank spends an
average of 40 for each transaction conducted at a branch. If a customer
uses the ATM facility, the cost drops to 18-20 per transaction, but it is
still much higher than the cost involved in online banking. “In order to
promote Net banking, the financial institutions offer certain services for
free or charge a nominal amount,” says Sangapure.
Why the cost differential
According to Harsh Roongta, chief executive officer of Apnapaisa.com, banks across the world are
within their rights to charge for Demand draft charges (This is between Rs
Rs 75 for for
any service for which they incur a cost. Now, this is being practised by
Indian banks as well. Says Rajiv Raj, co-founder and di50 - for
DD rector at CreditVidya.com: “Only if a Rs 100 for a bank
doesn op payment ’t incur any cost in Rs
completing a transaction will it
refrain Duplicate from charging statement the cus- Rs tomer,” he adds.
In fact, the RBI has not restricted any bank from charging a fee for such
transactions. “If you deposit a physical cheque from another bank and it is
credited to your account, both banks incur a cost, but you are not charged
anything. In the long run, the banks need to recover this amount to sustain
themselves,” explains Roongta. “The RBI restricts unreasonable charges. If
the fee is within permissible limits and the bank can justify it, it can
deduct this from their customers’ account,” adds Roongta.
To keep abreast of the paid services and
differential pricing, all you need to do is to
10000/- /Net
10000- Rs Rs 30 for DD request up to Rs DD request
visit your bank’s website. Moreover, the details of services and 10000
respective /- (phone/ fees Net banking will be) request posted
up to Rs on the Rs 30 notice for DD board request in every up to Rs series
bank branch. Nil
Indirect savings
Netbanking also helps save money in other ways. For instance, if you
have opted for the
banking phone banking facility to pay bills online, you can skip the late
payment fee. In addition, there are service providers like credit card
issuers, who charge a fee for branch payments. Some banks also offer bonus
points for online services, which can then be redeemed for online shopping
through the bank’s partner. Consider the ICICI Bank’s Payback facility and
State Bank of India’s Loyalty Rewards programme.
Safety vs savings
The benefits of Net banking notwithstanding, a lot of people balk at
availing of this option because of the concerns about the security of
online transactions, especially in an age where phishing and online fraud
is on the rise. Raj, however, counters this, saying that Internet banking
is probably safer than physical transactions. “Banks have introduced a double
authentication system, which makes Net banking much safer,” he says.
According to him, each customer is given a unique password to log into his
account. To complete any transaction, he needs to key in an ID sent via SMS
to his registered mobile number. “So it is not possible to go wrong. It’s
highly unlikely that any other person, even a fraudster, could have both
the unique log in/password and the registered mobile number,” he adds.
Incidentally, you don’t get any security assurances while transacting physically
at the bank.
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