Tricks played by ICICI Bank for no-frills account. Review on ICICI Bank

I have two savings accounts – one single and one joint, at ICICI Bank Aundh Branch, Pune. Till now ICICI Bank stipulated that a minimum QAB (Quarterly Average Balance) of Rs 5, 000 should be maintained in each account. In early May I received letters from ICICI Bank in which they ‘liked to inform me’ that the QAB to be maintained in my savings accounts is being increased from Rs 5, 000 to Rs 10, 000 effective July 1, 2008. Non-maintenance of the QAB in any quarter attracts a charge of Rs 750 plus applicable Service Tax.

ICICI Bank was good enough to allow me to close the accounts without any closure charges. I could also visit the branch and choose from an appropriate product. Accordingly I visited the branch recently. I was directed to meet a lady on one of the counters. I told her that I could not maintain Rs 20, 000 in two accounts. She promptly told me that this was in line with instructions from the Head Office. When I asked for some alternative, she replied in the negative and in fact told me that I could close the accounts.

Then I informed her that in line with RBI guidelines, the bank could not deny the facility of no-frills account with zero balance. She kept on arguing that zero balance facility is available only in salary account. Only when I threatened that I would complain to the banking ombudsman if ICICI Bank did not convert my existing accounts into no-frills accounts, she relented and asked me to give written requests signed by all account holders. On my query she confirmed that the accounts would be converted to no-frills accounts and the account numbers would remain the same. This was a respite for me as I have some ECS instructions in force for one of the accounts.

The next day I took the written requests duly signed by the respective account holders to convert my both accounts into no-frills accounts. That day I was directed to another person. He told me that this could not be done. Once again I had to bring out my trump card of banking ombudsman. At this he told me that converting existing accounts into no-frills accounts was not possible. I would have to open new accounts by filling in fresh application forms and providing documents in line with KYC norms. I could choose to close my existing accounts before or after opening the no-frills accounts. I went to the manager’s office to complain about this. The lady sitting in the manager’s chair (I think she is not the manager) did not know the rules on this, called some other person to check and asked me to wait.

While I was waiting to get the lady’s reply, the person whom I met earlier came to me and directed me to a large board indicating charges applicable for various transactions and facilities which are not available in no-frills accounts. I told him that I did not mind paying the charges. Then he came out with some other conditions which were not stated on the board!! On my request he gave me a pamphlet listing all the terms and conditions.

Salient conditions for the no-frills account are:

Only one cheque book of 25 leaves per annum. Additional cheque books will be charged Rs 50 plus ST Only six ATM transactions per quarter free. Additional transactions to be charged @ Rs 15 each plus ST. No internet banking No mobile banking Cash / cheque deposits and withdrawal transactions ONLY at the home branch. One customer can open only one no-frills account with ICICI Bank. The customer cannot introduce any other person to ICICI Bank. Under one customer ID, the customer can have a maximum of Rs 50, 000 balance at any time across all operative accounts, including term deposits. Cumulative deposits allowed in a no-frills account are limited to Rs 1, 00, 000 in a financial year. In the event of limits as laid down in any of the two conditions mentioned above being crossed, the no-frills account will be automatically converted into a normal savings account with applicable QAB.

And of course, ICICI Bank reserves the right to making changes to the terms at any time, but after intimating the customer.

I understand all ATM transactions are to be provided free at the bank’s ATMs. I also understand, the cost per transaction for the bank is lowest for net banking and highest when done at the branch. Yet, ICICI Bank is forcing account holders to transactions ONLY at the branch (home branch).

So, the moral is: ICICI Bank is very honestly honouring RBI instructions and providing no-frills account facility. But very cunningly it has imposed terms and conditions which make the entire exercise a big farce.