The first time this phrase in Pakistan was used by Daily DAWN in its Lead Editorial in 1979 when T&T introduced the so called self finance telephone connection scheme for rich but practically costing them same Rs. 1,800/- as to the poor man. But these rich under this scheme got telephone within 15 days while ordinary man waited for 15 to 20 years at an average. DAWN in its lead Editorial termed it as Legalised bribe.
Someone recently wrote to senior columnist Mr. Ahmed Nadeem Qassmi that banks had started deducting Rs. 50/- per month as service charges if balance in one’s account in a month was below Rs. 5000/-. Qassmi Sahib titling his Column “Governor State Bank may pay Attention” very rightly stated it was an injustice to majority of this country who cannot afford keeping Rs. 5000/- at all times due to Nil domestic savings today. In return the Governor State Bank replied to Qassmi Sahib that Banks are justified in levying such nominal fees for the service they render and those who cannot afford this should go to the banks which do not charge. An example was given as that of poor man’s bank. Where is that bank at the least I do not know. Has this Bank branches in every area like UBL, HBL or a poor man is to spend Rs. 50/- on rickshaw etc to save Rs. 50/- service charges. In a counter column Qassmi Sahib stated that it would had been better if Governor SBP had disclosed for public information the names of such banks. I think this question was not so important. The most important question which Qassmi Sahib should had asked to the Governor SBP was is that what is the guarantee that if people now shift their accounts to such banks indicated by the Governor, those banks all of a sudden any time in future would not start charging such services charges? After all SBP has given a “blanket” permission to banks under its Prudential Regulations allowing levy of any frees. The point raised in the first original column was deduction from those accounts having balance less than Rs. 5000/-.
Surfing the net on 12 December 2004, I came across United Bank web site. Under its General Miscellaneous column the indicating different fees charged by the Bank at serial No. 1 is postal local charges @ Rs. 25/- minimum whereas the Pakistan Post Office actually charges the UBL Rs. 4/-. Charges for a local registered item is mentioned Rs. 60/- while Pakistan Post Office charges from UBL Rs. 19/- Only. Local courier charges by the Bank is Rs.50/- whereas the most popular courier within the city of Karachi or Lahore charges Rs. 25/- from ordinary man and from bulk customers like Banks etc only Rs. 5 to Rs. 6/-.
Sometime back I got a Bank Draft in my favour issued by UBL Dubai drawn on UBL Karachi. When I deposited it into my UBL account Rs. 80/- were deducted as courier charges and Rs. 40/- as service charges. No courier service was used by the Bank as within Karachi these drafts/cheques are cleared centrally under Clearance House. For local clearance through Clearance House there had never ever been before any charge to account holder. Though no courier was used even then charging me Rs. 80/- was a day light pick-pocketing by a state organisation as TCS within Karachi at that time used to charge Rs. 20/- from ordinary man and from Banks perhaps Rs. 4 or Rs. 5/-. Service charges were charged additionally, When were those charges officially prescribed I was never informed by the Bank earlier. The government has always given an impression that home remittances from abroad were free from any levies. I raised the issue from SBP to Federal Ombudsman. What was the outcome of my this effort every one can well guess.
Nation is repeatedly told that economy is boosting and banks financial health is continuously fast improving. No body however tells are these ever increasing huge profits to Banks due to any new rationale working of the banks or due to today not paying profit to ordinary domestic savers which are in fact the back bone of a country’s economy and due to income through these deductions of Rs. 50s. The fact is as government revenue has mostly increased due to ever increasing direct or indirect taxes, likewise banks health has improved due to Licence fee levied by banks. As TV Licence, VCR Licence and so and so is levied, Banks have in fact levied a sort of Account Licence @ Rs. 50/- monthly on the ordinary man for his sin of keeping a bank account which causes paper work pain to the staff.
minimum balance requirements..many banks have them, in US and Uk and elsewhere so its not an unheard of thing. Banks are a business, their costs to maintain an account below a certain amount is higher than the money that theymay make.
as far as difference between costs to a bank and prices charged by that bank for those services is used to cover its expenses to provide that service. if my post office charges $10 for an expressmail, and you ask me to go send soemthing by expressmail, what about my time, and transportation cost?
bulk discounts are available for anything and everything, the banks lower their margins to get large customers where they will get the money on volume.
premium pricing is a concept used worldwide, and yes even for govt services.
in US you can get your passport much faster or get it renewed much faster if you want to pay for a premium service. Even for H-1 applications there is a fee for fast processing.
Mr. Fraudia, one must not just having a cursory reading of a piece jump arriving at conclusions and start making the comments. A little patience is much wise. Before making judicious comments it is wise to read patiently what the writer says.
We are Pakistanis and this Gup Shup Forum is basically a Pakistani Forum and for Pakistan though other items, regional issues are not barred but foremost is Pakistan. See your logo which says “Pakistan’s first official web site”. So while making comments and making comparison one need to be honest with himself in making such a comparison.
The post writer has raised the issue of service charges which are un-announced and very harash. Your comparison that In US these charges are levied is not a good comparison. First remember after all for 50 years these Pakistani Bank like HBL, NBP, UBL (25 years) were alive without levy of any service charges. During these periods namely without service charges if you have any banking knowledge you will find these banks actually developed. During these non service charges these banks eg UBL from just a small bank rose to today’s giant. After all they were working during all that period without any service charges. During all this period they were incurring expenses on maintaining these accounts. And above that they kept on giving good profit to the account holder, earning profits for themselves, increasing new branches due to heavy incomes then why the same could not be continued?
You started talking without understanding the matter. For example you argue for bulk customers (courier) charges are less and for others more. What is the point in it? Did you read the original post? The writer himself stated that for bulk customers (he gave example of UBL) charges are hardly Rs. 4 to 6 and even then Rs. 80/- courier charges were charged from him whereas best courier service in Karachi charges from a common man Rs. 25/-. Only. So it was a real point why then bank charged Rs. 80/- which it did not spend at all. You argue that for taking that envelope courier the Bank spend money on transport etc. You did not read the post that for that separately Rs. 40/- were charged. So is it not a looting when service/transport charge of Rs. 40/- had already been charged then charging Rs. 70 in access from the customer. And the most important thing which you completely ignored while making comparison of US is that the writer told in his post that in Karachi for clearance of cheques and drafts the Banks do not use postal or courier services as State Bank has established a centralized Clearance Housing which twice a day representative of each Bank comes, collect drafts/cheques drawing on his bank, take it to his main branch, and hands over in the afternoon the advices. So this transactions within same city limit in Karachi, Lahore, Islamabad does not involve any courier or post at all.
We cannot compare ourselves with USA or others. We have to see ourselves, our atmosphere, circumstances. If in US people can live without marriage, it is not that you give us example in US happens so as such why it should not be in Pakistan. Our people are poor people. By imposing service charges on foreign imported prescriptions in fact we have destroyed our real domestic savings. Have you ready very senior economist Mr. Sultan Ahmed? Four five years back he wrote two very nice articles one was under some pre-planned tendency real banking at root common level people is being destroyed to destroy the domestic savings which are the real back bone of a developing country like Pakistan. And his second column was Pakistan Origin Card was just a money minuting scheme.
Remember these giants of today namely HBL, Ubl became today’s giants in these 30/40 years when without charging any service charges and then they also gave 5 to 8% profits. Yes today due to appointment of imported consultants, first retiring with full brief case on golden hand shake and then re-appointing them on huge salaries as advisers consultants, giving in some cases advance salaries, to meet for these expenses if they are charging these fees then it is another matter.,