Drastic cut in bank service charges

Web posted at: 2/23/2010 6:35:47
Source ::: THE PENINSULA/ By MOBIN PANDIT & MOHAMED SAEED

DOHA: In a people-friendly move, banking regulator Qatar Central Bank (QCB) has drastically reduced retail banking service charges. The new banking fee slabs have already come into force.

Here are a few examples: No fee is to be charged for opening a savings bank or current account, and the minimum balance required to be maintained in a savings or current account is QR500 only.

If the balance (of QR500 or its equivalent in other currencies) is not maintained a fine of not more than QR10 a month is to be imposed. In no case can the fine cross the upper limit of QR10.

Routine bank statements are to be issued free. Bank statements for one to five years or a statement duly endorsed by a bank attracts a fee of QR10 only. The fee for bank statements for more than five years has been fixed

at QR20.

Withdrawal of cash from a bank counter attracts a fee of QR10 for amounts below

QR1,000. For sums exceeding this amount there is no fee. An ATM card issued for the first time does not entail any fee. For an ATM card issued later due to loss or damage one has to pay a fee of QR50. Cash withdrawals using ATMs are free. If a customer loses his ATM card code and wants a fresh one, the fee is QR10 only. Banks issuing clearance certificates to customers cannot charge a fee exceeding QR25.

For personal loans, service charges of one percent of the loan amount can be charged. For loans being topped off, one percent of the additional loan amount is to be levied as fee.

If a borrower is not able to pay the monthly installment (equated monthly installment or EMI) of a loan for some reason, a bank cannot impose a fine of more

than QR50.

The fee for restructuring a personal loan is QR250 irrespective of the loan amount.

A QCB circular warns banks in the country that overlooking its directives would lead to punitive action (fines).

Invoking Article 65 of Law Number 33 of 2006, the Central Bank has said it has been decided to put ceilings on the commission and fees banks deduct from customers’ accounts or directly collect from them.

The banks have also been instructed to inform their customers of the new fee slabs and charges in a ‘prominent and transparent’ manner.

Banks wanting to levy a fee on any special service or services need to seek prior approval of the QCB. Failure to do so would lead to penalties. “Banks are not allowed to charge fees and commissions at their own discretion,” the QCB has sternly warned the banking industry to the glee of the common man.

The Peninsula