Two people in my family received a registered post from Citibank when we weren’t around; and knowing Citibank I was sure something bad was going on, so we went to the post office pronto and fetched two letters. Both of them told us that:
a) From March 1, their Citibank Suvidha Accounts would no longer be valid and would be converted into “Citibanking” accounts.
b) Such citibanking accounts needed a minimum balance of Rs. 100,000. Of course they call it “Net Relationship Value” which means a sum of FDs and mutual funds and all that.
Since Citibank business is in general not beneficial (their FD rates are low, and since everything requires to either courier documents to their office or visit their extremely far-away office in Bangalore, the rational choice is to close the accounts. Luckily we can do that before March 1, 2013.
Citi told us that after first withdrawing the cash balance first, we could send in a letter with all unused cheque leaves duly cancelled. If you don’t want to maintain a Rs. 100,000 minimum balance with your bank, you might want to consider doing this too.
If we didn’t, they would charge us a Rs. 500 per month fee for a lower balance.
We didn’t have anything else linked to this account, but if you do, you will need to unlink those- loans, mutual funds, insurance etc.
Note that there’s nothing wrong with this – Citi has decided it doesn’t want low-balance accounts, and I’m free to take my business elsewhere. Other banks seem to be quite happy to have us. Also, Citi hasn’t hurt their “salary accounts” – only the regular suvidha accounts.
Just a heads up. It seems HSBC has upped their account balances to 300,000 minimum. Oh, it’s time for bank account churn.
…Yup due to this ridiculous change I am forced to close my 12 year old Suvidha Account with Citi Bank. And they seem to care a damn about that….
I think they want to maintain only “mota maal” with ‘mota” balances…;)
02.20.13 at 5:57 PM
Cant you convert the account to a No-Frills / Basic account with zero balance? RBI mandate is that every bank has to offer a no-frills account. Here’s the link for CitiBank account with zero balance https://www.online.citibank.co.in/soc/soc-pdfs/basic-banking-savings.pdf
02.20.13 at 6:03 PM
Do both the accounts you mention are salary accounts too?
02.20.13 at 7:49 PM
Sometimes, I fail to understand why people would want to open/maintain an account with other banks when SBI offers each and everything with a tremendous network of branches and flawless internet banking facility. I have an SBI account from ages and I rarely visit the branch. It is a mere misnomer that the customer service is not good. In fact, when I visit private sector banks, I wait for 30-60 minutes for a small work like getting a DD or depositing cash. With SBI, I just have to place an online request, walk in and pick up the DD. There are many other facilities that Pvt sector banks can not even dream to offer. Time for consumers to look beyond advertising. And yeah, BTW, after a recent notification, SBI has waived off the minimum balance requirement as well.
02.20.13 at 7:49 PM
Yes with government support you can leverage to any amount. Anything surprising here?
02.22.13 at 2:42 AM
Switch to Kotak bank..Good deposit rates and best banking website
02.20.13 at 8:20 PM
Not related to this post. But just wanted to point to this cnbc article –
http://www.cnbc.com/id/100471833
so apparently some with inside knowledge of the heinz deal did some option trades the day before the deal was announced, and the matter is now being looked into by the FBI.
That just made me think, that they take up rigging in their financial markets so much more seriously than us. I trade regularly, and frankly, in the past year or two, manipulation of individual stocks has become so so rampant.
I think we should amend our laws to make any sort of market rigging a criminal offence rather than just a civil one, and set up a separate CBI cell just to investigate such cases. Its beyond the scope of SEBI to manage.
If the system starts taking all these up more seriously and a few people are put behind bars, not just barred from capital markets activity for a couple of years, it would put the fear into this rampant manipulation activities.
02.20.13 at 8:36 PM
Keeping too few accounts makes life simple since we don’t need to remember too many user ids and passwords and account numbers. Had 4 older accounts and closed three of which and one is to be closed soon. Only have a salary account and SBI account to make life easier.
02.21.13 at 10:07 AM
And you know the beautiful part is that google ads is displaying citibank Ad on your webpage to open an account ;)
02.21.13 at 10:49 AM
What happens if I had an FD with citibank, which is less then the 100,000 limit? Will it require premature closure and hence incur a breakage charge?
Actually its not what if, but a colleague of mine is facing the problem. Is there a respite available in such case. Citi is asking him to pre close the FD and also telling that they will charge him 1% breakage charge as he is closing it before the maturity date.
02.21.13 at 1:42 PM
I also got similar letter from Citibank. How can they force someone to change the account type unilaterally? Putting a condition of minimum Rs.1 lakh balance without any additional benefits is a crime. For example recently I opened a similar account with HDFC bank where in the minimum average balance in 4 months is Rs. 1 lakh. They give 9% interest. Apart from that, if the balance goes below Rs.1 lakh, there is no penalty like Citibank which levies a penalty of Rs.500. In case of HDFC, if the balance goes below Rs.1 lakh, they give normal Savings account interest and not the 9% interest. Citibank does not have any of these features. Can we not sue Citibank in consumer court for highhandedness?
02.21.13 at 1:59 PM
Vandematrm ! Any such unilateral condition by Bank against the interest of consumer will cost heavy to the Bank. Citibank is a good Bank, i opened my Suvidha Account a decade back and Rs. 1000/- was the condition to maintain average balance. Whenever Citibank imposed a unfair and unreasonable condition / deduction i filed complaint before consumer forum and won the matter. So, lets not run away from opportunity instead we should avail it. Jai Hind !
04.04.13 at 8:20 PM