Banks are not Shylocks sucking money, customers need to pay for better service: HDFC’s Aditya Puri


MUMBAI: Banks are not Shylocks bent on sucking out money from customers, but those seeking higher levels of service must be open to paying for the convenience, said Aditya Puri, MD of HDFC BankBSE 0.42 %.

India’s longest serving bank chief also said strong third-quarter GDP growth has proved demonising of demonetisation was wrong.

Scrapping all banking charges ends up subsidising the wealthy carrying out high-end transactions and reduces banks’ ability to offer services to the poor, Puri said.

“You don’t go to Oberoi Hotel and ask for Mahesh Lunch Home rates,” Aditya Puri told ET in an interview.

“We are not here to charge usury costs, let us be very clear. As you go higher up on the type of product, it is perfectly reasonable to charge. There is a segment of the population which should not becharged, which we agree with.”

Recent charges levied by banks for ATM transactions and cash deposits beyond a limit have drawn criticism, especially in case of SBI, which restored the minimum balance amount after scrapping it in 2012. Opposition to charges on use of debit and credit cards at merchants is also strong, especially after demonetisation, which has led to a surge in digital payments.

“If I have to put up the (point of sale) terminals and they have to get it free, are you saying I should also subsidise Louis Vuitton or Pantaloons or Taj Hotels? Their sales are rising, he is swiping. Why should I subsidise him?” Puri said.

Demonetisation of high-value notes is pushing digitisation of Indian banking and it has not impacted growth much, though there has been some pain in the informal sector. “Admit that the impact (of demonetisation) has not been drastic,” said Puri.

He also rubbished claims that GDP growth was overstated as impact on informal sector had not been accounted for. “Now to start saying impact on parts of the informal economy was not reflected… we are talking about this for 20 years.”