Trends. Special banking for the privileged

From limiting the number of free ATM transactions to higher charges for a host of services, banks have been tightening the screws on customers in myriad ways. Many customers are understandably glum. But not so a certain privileged set — the ones with deep pockets and charmed relationships with banks. This group goes about its business as usual with banks bending over backwards to keep them happy. The goodies they gets to enjoy for free are many — demand drafts, fund transfers, transaction alerts, unlimited cheque leaves, cash transactions, and yes, any number of ATM transactions anywhere.

That’s for starters. These customers get pampered in many other ways too. They get preferential pricing on loans and many other financial products, and discounts or waiver of charges on lockers; they get the best lockers too. They have dedicated relationship managers and special toll-free numbers to connect pronto. Then, there’s doorstep banking, extended banking hours, enhanced daily withdrawal limits, and special counters at bank branches for exclusive service. Also, they get high-end plastic cards, fuel surcharge waiver at petrol pumps, access to airport lounges, offers on shopping, travel and eating out, family banking benefits, and complimentary lifestyle magazines.

The penalty for not maintaining minimum balance in savings accounts and for premature withdrawals of fixed deposits could also be waived off for this lucky set. Some banks also offer concierge services and customised investment advice. Essentially, this set is made to feel special. Welcome to privilege banking offered by several banks, especially the private and foreign ones and new entrants, which compete to bag high-end customers with differentiated products and services.

Nice, but how does one get into this cosy club? Money makes the world go around, especially with bankers. It costs banks some good money to go the extra mile and keep you happy. In return for the special treatment, they ask for big business from you to help them make money. Ergo: you need to maintain with the banks a certain relationship value, many notches above what is usually asked for. The relationship value could be, singly or in combination, in the form of savings account balances, fixed and recurring deposits, insurance policies, investments, loans, etc. These special accounts come under different names such as Signature, Wealth, Privy, Gold, Insignia and Premier. What’s common is the substantial monetary commitment they ask for.

For instance, to qualify for RBL Bank’s Signature Banking that it offers to its premium customers, you have to maintain a minimum total relationship value of ₹15 lakh across savings accounts, fixed accounts or investments. Alternatively, you have to maintain a minimum average monthly balance of ₹2 lakh in your savings accounts or ₹5 lakh in your current accounts. To become an ICICI Bank Wealth customer, you need to have a total relationship value of ₹25 lakh with the bank. This includes your savings and current account balances, fixed deposits, mutual funds and insurance policies.

HDFC Bank’s Imperia programme requires you to maintain minimum average monthly balance of ₹30 lakh across savings and fixed deposit accounts or maintain an average quarterly balance of ₹10 lakh in the savings account (₹15 lakh in the current account).

Kotak Mahindra Bank’s Privy League banking has four options — Insignia, Optima, Prima and Maxima. An Insignia customer needs to have a relationship value of ₹1 crore with the bank and an average monthly balance of ₹2.5 lakh. An Optima customer needs to have a relationship value of ₹30 lakh and average monthly balance of ₹2.5 lakh.

In Citibank India, a Citigold account holder must have a net relationship value of at least ₹75 lakh — this includes balances across savings and current accounts, deposits, mutual funds, loans including home loan balance, insurance premium, and a portion of demat holdings. HSBC Premier customers are required to meet the total relationship balance criteria of ₹40 lakh quarterly.

It’s apparent that new players on the block such as RBL Bank have relatively easier eligibility criteria to qualify for preferred banking; foreign banks such as Citibank set the bar very high, and private banks such as ICICI Bank occupy the middle ground. Check what’s exactly on offer at the various banks, before committing your money. Also, while you are sure nice to be pampered, be on the guard too — too much wealth management advice and portfolio churn may not be in the best interest. Pick and choose what’s good for you.

Take care to maintain the minimum relationship value to be eligible for the preferred status. Else, during periodic reviews, the bank could downgrade your account to lower categories with lower benefits and you could also be levied charges for slipping up.

On the other hand, if you step up the relationship value sharply — to a few crores at the minimum — you could become eligible for the next level of banking luxury — private banking. This is an altogether different experience, where you could get personalised advice by senior bankers and top-in-class customised solutions and, of course, the entire gamut of premium services, products and frills.

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