Monday, December 27, 2004

Bank raises minimum amount from $500 to $1,000 and announces it through

Bank raises minimum amount from $500 to $1,000 and announces it through: - NOV 30, 2004
A service fee of S$2 per month will be charged if monthly average balance falls below S$1,000, instead of S$500

The Basic Banking Account [available for customers with a monthly income of less than S$2,000.] is not affected by this change

I was alerted to this by one of my colleagues, i don't have a OCBC account personally, but I do think the reason given [...the monthly service fee is required to cover the administrative costs involved in the operation of the deposit account] is not very reasonable, as all banks have reduced their costs [salaries, rent, CISCO coverage, electricity] by replacing manned branches with automated bank lobbies.

Also, OCBC previously encouraged people to use statement instead of passbook accounts, by wavering the $2 charge. The reasoning then, I suppose, was that passbook accounts entailed more administrative costs. That reasoning has now been rejected, as there is now no distinction between statement & passbook accounts.

Bank raises minimum amount from $500 to $1,000 and announces it through:

Account statements
Branch notice boards
The Internet
But some customers still clueless

By Josephine Chew

IF you have an OCBC savings account with less than $1,000 in it, you may, by now, have been charged $2.

Till last month, the minimum amount required by the three local banks - DBS, UOB and OCBC - was only $500. If your balance fell below that, the $2 charge would apply.

But when OCBC increased the amount, some of their customers are saying they didn't know about it.

Mr Mehnga Singh was 'taken aback' when he checked his daughter's account at the Bishan branch of the bank.

'The woman at the counter told me $2 had been deducted and to make sure I had $1,000 in the account next month or there would be another $2 fee,' he said.

'Why didn't they inform us earlier? If I had known, I would have made sure there was at least $1,000 in it.'

Mr Singh, 42, a furniture salesman, said it wasn't so much the charge he objected to, as not knowing about it.

In 2000, he had heard on the news that DBS would start imposing the $2 monthly charge if his balance fell below $500. And he managed to avoid the charge.

'My family has four accounts there, so I shuffled money around to make sure all of them had at least $500,' he said.

OCBC said it had notified customers of the charge through account statements, branch notice boards and over the Internet.

But some customers claim they didn't get the statements, or visit branches, or the bank's website regularly.

Mr Singh felt the bank should have written to him.

He said he hadn't updated his passbook in three months and he didn't see the notices around the bank until it was pointed out to him.

'I was more attracted by a notice offering a free handphone if I took up an investment plan,' he said with a laugh.

Another customer was not aware of the change till The New Paper told her. Mrs Selena Fong, 46, read the notification in her monthly statement only after that.

But the housewife said: 'It doesn't really matter because I usually have more than $5,000 in it.'

A third OCBC customer felt the bank had done an acceptable job in telling customers of the change.

'It was in the statement of accounts sent to my home. And I also saw it advertised at the Specialist Shopping Centre branch I usually go to,' said Mrs Fiona Chan, 34, a human resource executive.

But she questioned the higher minimum balance: 'I think it's a bit strange - why are they doing this?'

Then she added: 'But it's not a big deal; at least we knew about it.'

When contacted, the Association of Banks in Singapore told The New Paper that OCBC had complied with the Consumer Code of Conduct by giving customers 'reasonable notice before any variation takes effect' which is specified as 30 days' notice.


THE revision of the monthly service fee is to cover the rising administrative costs involved in the operation of deposit accounts, OCBC Bank said.

Customers who have Basic Banking and Young Savers accounts are not affected by the revision.

'Customers who have proof from authorised community bodies that they are under public assistance schemes are also not affected by the revision as they do not pay monthly service fees for their savings accounts,' said Ms Lee Ee Ling, head of Consumer Portfolio Management of the bank's Consumer Financial Services.

'OCBC Bank takes very seriously the responsibility of keeping our customers informed about any changes in fees and charges or to their accounts.

'We would like to assure our customers and your readers that whenever we make such changes, we consider the use of multiple channels of communication.'

In this instance, based on the portfolio of deposit accounts, the bank had elected to put up notices at the customer contact points: Its branches, website and ATMs.

What other banks charge

IN March, OCBC and UOB increased the minimum balance required for corporate accounts to avoid a monthly $15 fee, from $3,000 and $5,000 respectively, to $10,000.

Both said customers were informed through monthly statements and notices at branches and on the Internet. But one customer complained to the Pro-Enterprise Panel.

The Monetary Authority of Singapore said banks should give customers ample notice of any change to the terms and conditions of their accounts, and the reasons for the change.

DBS and UOB said they have no plans now to increase the minimum balance for individual basic savings accounts.

And how do foreign banks compare with local banks in this matter?

For a basic savings account, three of them - Standard Chartered, ABN-Amro and Citibank - charge $2 irrespective of average monthly balance. At HSBC, the $2 charge is imposed only if the account balance falls below $2,000.

However, all the banks, local and foreign, waive this charge for some customers, such as those on the MCYS Public Assistance Scheme and Special Grant schemes.

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