Banks levy fees on large deposits to offset cash glut

In a bid to avoid a government levied tax, commercial banks have imposed a fee on deposits higher than their designated threshold, and set lower deposit targets in the range of Rs1 billion to Rs5bn. All major commercial banks, including Bank Alfalah, MCB, Meezan, HBL and Standard Chartered have sent notices to clients who have large deposits ranging from Rs1bn to Rs5bn, with each bank setting its own maximum threshold. According to the schedule of charges, which came into effect from Thursday, Nov 21, any account holder whose balance on the last day of the month is above the designated threshold, would now have to pay a five per cent monthly fee. This applies to both rupee and foreign currency accounts. In addition, some banks, like Meezan, have also applied maximum daily credit balance limits on checking accounts. “The bank has the right to refuse and/or to return the amount over and above said limit,” according to notices received by customers.