Leading private sector lender HDFC Bank will double the fees charged on cash payments made towards credit card bills to Rs 100 from the next month.
The bank currently charges a processing fee of Rs 50 for every credit card repayment made in cash at its branches and ATMs.
In a circular to its customers, the bank said that the "fee for payments made by depositing cash at HDFC Bank branches/ATMs will be revised to Rs 100, effective November 1, 2012."
Out of the 1.76 crore outstanding credit cards in the country as on March 2012, HDFC Bank is the largest issuer of such cards with about 56 lakh customers, accounting for about 32 per cent of the overall market size.
Besides payments made through cheques and internet, customers also use the bank branches and ATMs for cashdeposits to settle their monthly credit card bills. HDFC Bank has a network of more than 2,500 branches and over 9,000 ATMs across the country.
According to estimates, about one-third of total credit card users make cash payments. Last fiscal, credit card users spent an average Rs 55,000 almost 3 times the Rs 19,000 spent five years ago.
The bank officials said there is a lot of manual work involved in branch-level transactions and that is the reason customers are asked to pay for these services.
The move to hike these fees is in line with a strategy to encourage customers to use online mode and reduce cash handling and the related transaction processes at branches and ATMs, they added.
A number of other credit card issuing banks also charge processing fees for cash payments, although the charges vary from one to another bank.