HDFC Bank charges Rs100 per quarter for accessing 'by-invite-only' feature!
Moneylife Digital Team 09 February 2017
Several customers are venting their ire over what they call as 'unethical' banking by HDFC Bank, India's largest private sector lender by assets. Karthik Srinivasan, an old customer of the Bank highlighted the issue in his blog post, which has gone viral on the social media. Karthik and other HDFC Bank customers are opposing the invite only program that they claim, "unethically assumes that you are already in and are willing to pay for it". Unless a customer reads the entire mail and opts out from this offer, she would be charged Rs100 per quarter for availing the Virtual Relationship Manager (VRM) feature. 
 
UPDATED on 10 Feb 2017 to add response from HDFC Bank to Karthik (in the end)
 
Here is what Karthik wrote in his blog post (http://beastoftraal.com/2017/02/01/hdfc-banks-invite-only-program-that-unethically-assumes-you-are-already-in-and-are-willing-to-pay-for-it/)...
 
My first salary was credited to a HDFC bank account. In New Delhi. I have since had HDFC accounts—salary, personal, home loan, car loan, you name it—for over 2 decades.
 
Now, I’m not adding these details to sentimentalize this post. (Oh well, that first salary part is a bit maudlin, I accept!). The point is, there’s way too much banking between me and HDFC that I can’t wash them off if the need arises and move to another bank, without a lot of wasted time and effort.
 
Let me explain what the problem is, first.
 
I received a mail from HDFC Bank on January 30th. The subject said, “Dear Karthik Srinivasan, Welcome to HDFC Bank Preferred Banking Programme!”
 
I get at least 2-3 emails from HDFC every week. All of them ensure that they call me a ‘preferred’ banking customer. This has been going on for over 2-3 years, if I recall right. Now, I have no idea what this ‘preferred’ banking entails. I’m totally open to the possibility that I was shown a laundry list of fine print when this account was opened and I may have signed it too.
 
Anyway, I opened the mail curiously, to know why I’m being welcomed into something that I’m adequately a part of. This was the entirety of that mail.
 
 
Crux: an invite-only virtual relationship manager has been assigned to me.
 
My first thought: Oh great! The once-every-2-years that I actually call someone from HDFC bank can be slightly more easier now!
 
Then, I notice this.
 
 
What?
 
Let me deconstruct that.
 
I was enrolled into this ‘program’ in January 2016. After a year of being in the program that I did not ask to be enrolled into and have no recollection of being in (I did check my emails from 2015, in December, and 206, in January and February, as also emails from HDFC when I had opened this account), I will, from now on, be charged Rs.100 per quarter to be in this program.
 
And, service tax extra.
 
What cheesed me off is not the nominal amount. It was,
 
 
This is an opt-out program.
 
So, I clicked on the link and performed the 2 actions needed to unenroll myself out of this invite-only program that presumes I’m already in.
 
 
 
In simple terms it means, HDFC depends on a customer’s action to not charge him/her. The usual, sane and honest method is, ‘HDFC depends on a customer’s action to charge him/her’. It means HDFC seeks consent to charge a customer. What they are doing is seeking consent to not charge a customer.
 
In other words, HDFC depends on the customer to,
1. open the mail,
2. read through the contents,
3. notice a way to opt-out,
4. click the opt-out link,
5. choose ‘No’ as confirmation and
6. submit the form
… to not charge him/her.
 
If the customer doesn’t perform even one of the above 6 tasks, he/she will be charged.
 
To make it even more explicit, HDFC presented me with the following:
“I, Karthik Srinivasan, agree to pay Rs.100 (plus service tax) per quarter towards the Virtual Relationship Management Programme. Unless I click on the button below to indicate my preference not to be part of this program, I’d be charged for this service.”
 
This is clearly unethical and devious.
 
It particularly hits home for me because I was in Flipkart, handling their corporate communications when they faced a similar issue. Back in 2012, when Flipkart launched the ‘save credit card’ feature (where customers have an option of saving their credit card details for easy payment in the future) after getting a PCI-DSS certification, they rolled out the feature where the check-box for saving the card is checked, by default. This is a classic opt-out tactic that is known to increase sign-ups/uptake of whatever program you are running.
 
It means, customers, who are previously unaware that Flipkart had a ‘save-card’ feature now need to take note of this feature and uncheck that box to opt out of this feature. In other words, Flipkart had pre-decided that customers want to be a part of it. And unless a customer explicitly asks not be part of it (by unchecking the box), they will continue to be part of this.
 
After this service was launched, there was a lot of hue and cry about Flipkart’s unethical practice in rolling out this feature. What was truly admirable, back then, was the fact that Flipkart not only acknowledged this error in judgement and set right the process (to opt-in; that is, give customers an unchecked box and let them exercise the option to be a part of this program, or not), but they also blogged about both the error and the reason why they changed it. Here is the blog, from 2012.
 
HDFC is treading a far more dangerous ground. Flipkart did not charge money from people who forgot to opt out. They merely saved some data without explicit consent. HDFC, in this case, is going to take money from people who may have either ignored the mail, or forgotten to see the message about opting out in the mail. I’m fairly sure there are RBI guidelines that determine that any charge levied on the customer should be done after seeking explicit permission to do so. That is, after explaining to the customer that they are going to be charged for specific services. And not merely inform a customer that they’d be charged from now on for a service and only if they choose not to be part of it, will they be left alone without a charge.
 
The irony is that this HDFC mail starts by calling it an ‘invite-only’ service. The crucial point is that my option to decline the invite hinges on my opening and reading this email fully, and taking appropriate action.
 
I emailed HDFC Bank asking them why this is an opt-out and not an opt-in. I tweeted to them too. I got the following response after 2 days.
 
 
They have merely reiterated the status quo to me – that this is what it is, but hey, we did give you an option to get out of this scheme and about being charged. Tough luck if you didn’t read the mail.
 
You could ask me a question based on ‘caveat emptor’ (buyer beware), which says, ‘that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made’. The argument could be, I, as a customer, should be vigilant and alert enough to go through all communication from my bank and take note of the charges proposed to be levied on me and communicate my intent to agree or disagree appropriately. This is a fair argument, but let me present how it may look like, in the real world.
 
You enter your favorite, and usual cloth store. You try out 3-4 clothes and decide that you don’t like the fit and decide to try another store. As you walk out, the sales guy calls you back and says that you need to buy them. You ask him why. He says that the price tags in each of the clothing pieces you tried have a fine print that if you try them, you’d need to buy them too. That your trial amounts to a legal contract between the seller and buyer. This is opt-out. If it was opt-in, before you enter the trial room, a store person would have told you the rules and sought your consent.
 
If you have got this email, or recall being in something called ‘Virtual Relationship Management Programme’, please do check your email and take action based on your interest and intent.
 
So, considering all this, and the effort it’d take for me to close *all* my HDFC accounts and move to another bank, I’m not going that route. Instead, I’m going to try another route, to try and make HDFC take responsibility for this lapse in ethics and apologize, not just to me, but in public, to all their customers.
 
I’m going to share this blog every single day for the rest of the year – one day in the morning and the next, in the evening (and so on) on Twitter. And once every week on Facebook and LinkedIn for the rest of the year. I’ll tag relevant people to each tweet/post as necessary to ensure that it is read and understood by as many people as possible.
 
I’m very curious to see if my bank has an ethical stand on this issue at all.
 
UPDATE: The response sent by HDFC Bank to Karthik...
 
Dear Mr. Srinivasan,

Thanks for giving us the opportunity to clarify and apologies for the delay in responding.

With regard to your query, we'd like to humbly submit that the bank has been fair and transparent in the following:
a) giving the customer the opportunity to test the service for free for a year before levying any charges.
b) providing an opt-out facility for those who do not wish to avail of these services, which is in compliance with all regulatory requirements.
c) communicating the charges to customers at regular intervals, in the welcome letter and subsequently in their monthly statements.

You will also appreciate that the benefits of the programme far outweigh the nominal fee of Rs100 per quarter, which is in line with similar premium programmes available in the market. Here are some of the key benefits listed below:

1) A lifetime waiver on locker rentals
2) Preferential pricing for forex, loans and deposits
3) Waiver of non-maintenance charge of average monthly balance (AMB)
4) A dedicated Personal Banker (PB) / Relationship Manager (RM)
5) Unlimited usage of ATMs, both own and other bank
6) Free subscription to in-house e-magazine AAG, a specialised advisory on investments and stock reports
7) VRM- A platform to enhance customer experience and engagement through a 24*7 access to a Virtual Relationship Manager (VRM).

Trust, we have been able to clarify our stand adequately. Needless to say, the bank remains committed to the highest standards of ethics and business conduct.
Comments
MOHAN SIROYA
4 years ago
Since the present Government and the RB Governor has come, only bank centric rules are introduced by them and the say of a common account holder is throttled . It appears it is done with precision planning and one by one a card is opened and a new rule to aid bankers crops up. First the Prime Minister will cajole and motivate to open a bank account .When it is done, more the merrier for banks to extract money from the deposit holders on one reason or the other. Bank have been given a free hand to introduce any charge for any service or cut the services wherever banks want ,RBI is no more a custodian of the bank depositors. No where in the world, a bank account holder is restricted to withdraw his money from ATM, but in India no more .First a clarion call is given that every one should digitise the transactions. When it is done, instead of getting any incentive ,one has to pay charge who is using the digitisation, beyond minimum number of times prescribed by the banks themselves and not RBI. Then one also has to pay for MQB in the account, money transfer from bank to bank, in issuing D Ds or Pay orders, introduce unheard of high locker rent etc. And the icing on the cake is if bank is guilty of any malpractice or deficiency in service ; noen will reply or take care of it. RBI has constituted a so called CONSUMER EDUCATION AND PROTECTION CELL
( abridged as CEPC). But instead of giving education and protection to the account holder complainant, it gives protection to banks .It disposes the complaint by saying redress at the bank level or Ombudsman will take care of that. Banking Ombudsman is another protective shield for the Banks where the complaints get summary disposal, against which there is no appeal even with the Regulator RBI .So the only remedy available to the Consumers is either go to Consumer Forums or to the HC by way of writ. My own complaint about grave deficiency in service for my savings account in IDBI is a languishing since March 2017 without any accountability at any level. A copy of that was also sent to Moneylife for publication but gone in-vain.Ombudsman schemes and RTI Act or other consumer friendly statutory provisions are being pruned down by the Government in systematic manner . Present ruling party is having a brute majority now in
in Parliament, If any opposition voice is raised it goes the Hindi proverbial way "Nakkarkhane Mein Tooti Ki Aawaz".
I am afraid that it will be no wonder when a fine morning we may get the Consumption tax, fixed quantity for eating at Home etc. in the name of saving food for the.
"Poors". I wish Mr. Srinivasan good luck in his endeavour and we are with him. But let me caution that your right to express in social media is also under scanner and in the process of curb.



Since the present Government and the RB Governor has come, only bank centric rules are introduced by them and the say of a common account holder is throttled . It appears it is done with precision planning and one by one a card is opened and a new rule to aid bankers crops up. First the Prime Minister will cajole and motivate to open a bank account .When it is done, more the merrier for banks to extract money from the deposit holders on one reason or the other. Bank have been given a free hand to introduce any charge for any service or cut the services wherever banks want ,RBI is no more a custodian of the bank depositors. No where in the world, a bank account holder is restricted to withdraw his money from ATM, but in India no more .First a clarion call is given that every one should digitise the transactions. When it is done, instead of getting any incentive ,one has to pay charge who is using the digitisation, beyond minimum number of times prescribed by the banks themselves and not RBI. Then one also has to pay for MQB in the account, money transfer from bank to bank, in issuing D Ds or Pay orders, introduce unheard of high locker rent etc. And the icing on the cake is if bank is guilty of any malpractice or deficiency in service ; noen will reply or take care of it. RBI has constituted a so called CONSUMER EDUCATION AND PROTECTION CELL
( abridged as CEPC). But instead of giving education and protection to the account holder complainant, it gives protection to banks .It disposes the complaint by saying redress at the bank level or Ombudsman will take care of that. Banking Ombudsman is another protective shield for the Banks where the complaints get summary disposal, against which there is no appeal even with the Regulator RBI .So the only remedy available to the Consumers is either go to Consumer Forums or to the HC by way of writ. My own complaint about grave deficiency in service for my savings account in IDBI is a languishing since March 2017 without any accountability at any level. A copy of that was also sent to Moneylife for publication but gone in-vain.Ombudsman schemes and RTI Act or other consumer friendly statutory provisions are being pruned down by the Government in systematic manner . Present ruling party is having a brute majority now in
in Parliament, If any opposition voice is raised it goes the Hindi proverbial way "Nakkarkhane Mein Tooti Ki Aawaz".
I am afraid that it will be no wonder when a fine morning we may get the Consumption tax, fixed quantity for eating at Home etc. in the name of saving food for the.
"Poors". I wish Mr. Srinivasan good luck in his endeavour and we are with him. But let me caution that your right to express in social media is also under scanner and in the process of curb.



Pradeep Kumar M Sreedharan
Replied to MOHAN SIROYA comment 4 years ago
We badly miss a consumer commission.
That will never be too.
We are looted and silenced because we are unitary.
Banks are advantaged because they are aggregates.
CAN WE TOO AGGREGATE - IN MODERN WORLD IT NEEDS ONLY FLICK OF FINGERS IN A MESSENGER APP
Pradeep Kumar M Sreedharan
Replied to Pradeep Kumar M Sreedharan comment 4 years ago
It is no good running away, ie, changing banks.
The system stinks.
We have to challenge from within, having a clean banking service is our basic right. It is the basic right of any society.
MB Singh
4 years ago
Four times I visited the HDFC bank in last month and I see someone complaining for being charged for not maintaining the minimum balance. At the rate of Rs 700 a month as penalty, a balance of Rs 7000 is reduced to nil and after that they also show negative balance. About Rs 18 they deduct as SMS charges for sending one alert message on phone. LOOT!
MB Singh
Replied to MB Singh comment 4 years ago
Sorry, the SMS charges (Rs 17.25) are for three month period.
Joginder Singh
4 years ago
@HDFCBANK is addicted to robbing customers and showing higher earnings to its FII shareholders (37% foreigner share holding) so the Bank is valued higher every quarter. So called culture of enhancing the shareholders value by fleecing customers was started long back by #Aditya Puri. RMs are known to trick HNI's into worthless schemes and investments where Bank gets hefty kickbacks / commissions from 4.25% - 15%. Bank offers lifetime free credit cards but down the line upgrades to a premium card and starts milkinh 4 - 5000 annual fee, not even opt out options. similar tricks on Debit Cards. Annual fee keeps rising with some new color or logo added on Debit Card and fee can go 10 folds. Same thing they do with Demat Accounts. Most customer's demat accounts from Centurion Bank and other merged entities were rendered useless and the Dividend cheques with account numbers of those dead banks merged with HDFC Bank were dishonored because of mis- match of account numbers ( HDFC Bank will only care about seam less merger that benefits them) but they digged out those customers account numbers in HDFC and start taking the money out - and not in 100's but 1000's. Bank has the mind set that customers have to pay them for leaving the money with Bank and if they want any service, or talk to the Manager (most - they have are Damagers), Bank has the right to take money and do not need any consent from Customer. Customer needs Bank's consent to take their own money out but Bank does not. And RBI sides with #AdityaPuri most times and if one charge is frowned upon, after couple months Bank has a new paid service or product for which they start debiting. They robbed lacks of Bank of Punjab Customers after merger as BoP opened tons of Zero Balance accounts and HDFC Bank started debiting the fee whenever low balance and will take all the money in few quarters. #HDFCBank has a cash of 38000 Crore on its balance sheet, Supreme Court should confiscate that, taking Suo Motto action and return it to the rightful owners whose accounts were drained out without consent, without knowledge and without any recourse available to them.
Pradeep Kumar M Sreedharan
Replied to Joginder Singh comment 4 years ago
To me, RBI is the Alibaba mothering the 40 thieves and the minister is what - I don't know
Pradeep Kumar M Sreedharan
5 years ago
We as customers have no say in the way the system is constructed, and RBI & Govt exists not blunt our protests, but to kill it by eliminating any actionable forum. That this should happen in the digital age is their powerful statement
B. Yerram Raju
5 years ago
Customer is one who pays when he/she gets into the bank either physically or through internet and not who demands a service he wants!! This is how the Banks redefine their customers post computerization. You call the Bank for a service or enquiry, you are charged! If you ignore the charges first time every second time you avail such service or call you are slapped with the charges. HDFC Bank is not so different from others in this regard. There are 25 types of charges you are debited if you have an account with a PSB and a few more with the private sector newgen banks like the HDFC Bank. Technology should have made banking easy and cheap. Banks should have recovered their investment on technology during th e last fifteen years and yet the customers are fleeced and for not doing a service that they promise. There is no cognizable punishment for non-delivery of a service for which payment is made and so the case even with those services that get into their list. Your complaints, if made only on their template, will get a stereo typed response that if you do not get response within 48 hours, you may get in touch with their customer relations manager. Did you not hear the encomiums paid by the PM, FM, and the RBIto the banks for the excellent service they rendered during the demonetisation drive?
Suketu Shah
5 years ago
In Feb 2013 I gave all papers to close my account permanently.Under some excuse their head of Western region Wealth Management via his influences kept delaying closing of my account.Even after submitting all papers my account was finally closed 1 month later on 1 March 2013.What has been mentioned is correct -this bank makes it almost impossible to close the account via sheer harassment.Think several times before opening an account with them and if you already have an account with them God help you.
Jagadish Kota
5 years ago
I am going to close my account if they don't revert the charges.
Joginder Singh
Replied to Jagadish Kota comment 4 years ago
They will reverse one charge and come out with a new one. Its their standard practice
Pradeep Kumar M Sreedharan
Replied to Jagadish Kota comment 5 years ago
Fight from within, don't quit please
Jagadish Kota
5 years ago
I am going to close my account if they don't revert the charges.
Hemal Mehta
5 years ago
Charging for a opt-out scheme is a day light robbery.
I have closed my wife's account and will be closing my mother's account pretty soon.
RBI should make a rule that not a single rupee be deducted from bank account for any bank charges unless, the bank has a written communication from the customer. Auto debit for new charges should be banned.
The money in the bank account is of the customer and not of the bank.
Joginder Singh
Replied to Hemal Mehta comment 4 years ago
Its the customer who has to fill out forms to withdraw their own money. Bank does not have to do any such thing. They have free access to this free money. Direct debit should require the consent from Account holder but here @HDFCBANK considers itself the rightful owner of the account and not the Custodian of the Account.
Pradeep Kumar M Sreedharan
Replied to Joginder Singh comment 4 years ago
Your deposit isn't your money anymore, Bank owns it; you just have a claim on the amount, that's all
Shobhit
5 years ago
This is a CLASSIC case of daylight robbery by a so called CLASSIC Bank. How can someone steal my money from my bank account with a frivolous OPT OUT OPTION.
Chirpy
5 years ago
I closed my account when HDFC Bank did this sometime last year ( if I remember right ) ... don't have the patience or the time for a bank that one cannot trust.
Pradeep Kumar M Sreedharan
Replied to Chirpy comment 5 years ago
I took an alternate bank account and is fighting HDFC from within. If I am unsuccessful, at least, it proves that the system is rotten - including the Govts.
Om Prakash Arora
5 years ago
I also received similar mail for being in their Classic program.When I decide to opt out after clicking on the link in the mail and to be doubly sure, also talking to personal banker,who advised me to record objection on line after logging in .Thereafter I received a call from personal banker asking for reason of opting out. When I said that I do not want to pay for the service that I do not need ,she agreed to reverse the charge when levied.I wanted it confirmed over e mail and to be valid for all times in future. I have now received the confirmation.
The experience which caused lot of waste of time n leaving an impression that Bank wanted to fleece .
Few years back they has a similar charge levied on the ISA account opened for the customers which was free to begin with.
Joginder Singh
Replied to Om Prakash Arora comment 4 years ago
They offer Free for Life Credit Cards but without Customers consent, they will mail out a upgraded card and if you use it, you have accepted the annual fee of few thousands that goes to increase the Bank's Earning Per Share to keep the Foreigner Share Holders happy. Bank does loot your money but honestly pass it on to their foreigner share holders (37%)
Vidya
5 years ago
In my case also hdfc bank charged Rs.100 per account (I had 5 account) ie 500 per quarter as Programme Management fees for imperia programme which they registered me. I had follow up with them to finally get charges reversed. Most people do follow for such unethical charges and bank benefits and continue do such unethical things. It is clear case of cheating customers who are not alert.
Pradeep Kumar M Sreedharan
5 years ago
Wearing down the customer at CRM level and swindling the less alert (eternal alertness is impossible for the common man, for unlike the Bankers, our lives aren't centered around banking) is modus operandi of the swindlers, the system being installed employing behavioural economics studies obviously.
M S Prabhakar
Replied to Pradeep Kumar M Sreedharan comment 5 years ago
Can you translate your comment to English?
Suketu Shah
5 years ago
They charged Mutual charges twice also to us in 2011(a significant amount) thinking we wl not notice.We got it reversed and there was no apology also.This is a standard modus operandi in hdfc bank.It is clear this banks best days are behind them.The atmosphere in the bank is so vicious that their employees of hdfc bank strongly dislike each other and make fun of each other rather than working as a team.

Best to avoid hdfc bank and also axis bank.There are better private banks like Yes Bank and ICICI Bank.
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