Nepali Times
My Two Paisa
Bank robbery


Have you ever been unpleasantly surprised to find your bank balance less than your expectation? Only when you check your statement do you realise out that your bank has graciously charged Rs 200 or more for simple act of maintaining your account or for your debit card. The most common complainers at a commercial bank I used to work for were account holders who suddenly found out that Rs 500 disappeared from their account every month because they had not maintained the minimum balance. When they demanded an explanation, they were shown the fine print in the 'Terms and Conditions' they signed.

Many banks and financial institutions make millions each year from charges and penalties. Apart from maintenance fees, these charges are imposed for unauthorised overdrafts, bounced cheques, breaching the minimum balance limit and for several other conditions. Sometimes, changes made in the account's terms and conditions which, by default, allow the bank to debit your account.

Principally, charges should only reflect the administrative costs of dealing with the problem. In other words, the customer should only be asked to pay the cost of fixing the irregularity in the account. But often, these charges are overpriced. It is difficult to believe that the cost of informing an account holder that he or she has crossed the minimum balance limit so that they correct it is more than Rs 250 per month.

Financial institutions argue that these charges are fair as they are contractually allowed to do so. But the issue is that in most cases the banks do not even make an effort to inform the customer about the irregularities in their accounts or about changes in the terms and conditions. When you fill up an application for opening a new account, the bank asks you your mailing address, phone number, mobile number and email address. But this information is shelved, and used only when the credit card bills are due or when there are new schemes available.

Even the customers think that banks have a legal right to make all these charges and let them pass without complaint. But pick up the form of a new account for any bank, you will also find clauses such as: 'The Bank reserves the right to amend these rules at any time and in any manner which the bank deems necessary with or without notice to the applicants or the public'.

Competition may have transformed several aspects of the banking sector in Nepal, but customers are still treated shabbily, as if the bank is doing us a favour and not the other way around. A bank that thinks the small guys don't matter is doomed, but that message hasn't sunk into most bank boardrooms. Easy cash earned by slyly cheating the customer can be costly in the long run. Customer is king (well maybe president) still.

The central bank has to be proactive in ensuring that the banks play fair. Recently, Nepal Rastra Bank issued a circular regarding banking fees. It directed the banks to establish a front office and to inform all customers about the conditions of fees clearly. In absence of a consumer's court, this step is not enough to protect customers. It has to devise a banking code that strictly ensures disclosure of every condition and cost involved in an agreement. The banks must also give customers an early notice of charges so that they have a chance to correct their accounts. Until then, customers need to be informed and aware themselves.

• Read terms and conditions carefully
If bank balance does not match your calculations, demand an explanation
If unfairly charged, challenge the fees
Keep sharp eye on your account
Stay out of the red.

1. nationalize all banks
Standard Chartered bank charges 500 bucks as account maintenance every month. I had not used that account for almost 3 years. I went to check my balance about a month back and I was told my balance was -3500 (negative 3500) and that I have to pay at least 4000 to get it reactivated. B******. I mean 3 years and they are still charging me 500 every month... I thought they were supposed to deactivate the account after 6 months of non-activity.

2. truth us the only absolute
Agree with the poster above, banks have no place being private and need to all be nationalized. Their sole purpose is to suck the wealth out a nation. Think about it, who does that 500 NPR fee affect? Definitely not those that have the money to avoid a low balance. Also, the author is doing a great disservice to the people by asking them to "Read terms and conditions carefully." Is this a joke? Perhaps you would like read every one of those terms and conditions to the 16 million people who are illiterate? what ever happened to consumer protection? The problem is that the Nepali Banking system is modeled after the western one and well, lets just say they're not really solvent if you dare to look underneath the rug.

3. Buzz
Nationalize what rubbish. Govt is incompetent. It has bankrupt Nepal Bank and Nepal Banijya Bank. The economy should be free to operate. The role of the govt is to regulate and make sure the players play by the rules. 

4. jefferson
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
----------------Thomas Jefferson

Only if the Americans had heeded to their founding father's advice, they would have avoided the mess that they are in and we are "somehow" heading in that same direction as well. Sad indeed.

If the banks are making money, then you and I are losing it. How on earth do you think that banks make a 'profit'? What do they produce and sell?

I agree that businesses that produce genuine products and services need to profit (not profiteer). Banks are not the same. They produce debt. They sell money. Money is their commodity. Debt is the price of money that the public has to pay. Debt is an undesirable burden on us all as the world events have proven. Who created this crisis? And who are those most affected by this crisis? Of course the people of countries where Private banks are most powerful, mainly USA and Europe.

But that is not the issue here. The issue is that Banks keep our money (mainly private banks), they give us interest rates that is much below inflation rates (e.g. inflation rate is around 15% and they pay us 3.5% average interest). To top it off, they charge an additional 'account maintenance fee'. Horrendous. And then again if you want a loan, there is nothing available below 22% (for a person with good record). Oh! and I hear them hankering 'deregulate the banking industry', 'deregulate the interest regime', 'deregulate the limit of debt issuance', 'let us self-regulate'... Do you expect those who can't wipe their own a** to regulate the 'industry'?... wtf... 

5. kamdar-

If you can afford to open an reguar checking account , wants to carry a debit card and use debit card  you should be able to handle your money and aware of your balance.

We have lots of money to pay off fees like that it might help to make consumer aware!!!!

Thats how banks run !!!!

Its good thing that they are not charging 3000 per overdraft transaction, it would hurt.


6. A K Sherpa
I had an account with Nabil Bank.  I was a victim of this scam of maintaning minimum balance on 3 occasions for being out of the country  and  lost over Rs. 4000 to update the balance because the bank had it raised it 3 occasions from from a ceiling of Rs. 10,000, 15,000 to 30,000 ( or was it 10, 15 or 20 thousands ?)  I wrote to the National Dailies a couple of times. they never published my letter, wrote to the Rastra Bank..there never was an action.. This was a loot in broad day light but some how I was compelled to submit to it...It would be interesting for NRB to initiate a search to find out how much money banks have usurped from sidha sadha Nepali people...

7. B2B
It sickens me to the pit of my stomach when I hear again the banksters of another type are doing what others are doing in Wall Street, the City et al.- to rob consumers blind!

What remains to be done is to create an association of 30 million consumers of Nepal and file in the court a subpoena against the whole Banking System in Nepal. That's a way of cocking a snook at the Establishment not at all at the service of the citizens but for grabbing the wealth of innocent customers, bar one victim namely  the future trust and confidence in the Banking System  in a new country  where opportunities to develop the same is immense, by using unfair means.

Go figure, greed never ends!?!

(11 JAN 2013 - 17 JAN 2013)