Jagoinvestor
July 1, 2013
Should you become Priority Banking Customer? Are their any advantages ?
Have you ever thought of applying for Priority Banking with your bank (also called as Preferred banking)? A lot of banks offer something called “Priority Banking Solutions” to their customers who qualify the eligibility criteria. A priority banking customer is treated in a more special way and is taken care of priority by the bank. Let us talk about it in detail and does it make any sense for you as a customer to apply for priority banking customer or not?
Why does a bank have a Priority Banking Model?
The first question to understand is why do banks have a Priority banking model at all? The reason is very simple, to treat different levels of customers differently. If you want to harshly put it, then its just a way of keep a separate list of High Net-worth Individuals and focus on them more and service them in a better manner, because one customer who is eligible for priority banking will give 100 times more business/profit to the bank compared to a normal customer. A preferred banking customer will have a few eligibility criteria to honor, which is generally linked to his bank amount balance.
When I looked at HDFC Priority Programme, its eligibility criteria mentions this –
You are eligible for the HDFC Bank Priority Programme ** if you:
- Hold at least one Savings or Current account, sole or joint, with HDFC Bank.
- Maintain a minimum Average Monthly balance of Rs. 15 Lakhs across all your accounts (Savings, Current and Fixed Deposits*)
OR- Maintain an Average Quarterly Balance of Rs. 2 Lakhs in your Savings account.
OR- Maintain an Average Quarterly Balance of Rs. 5 Lakhs in your Current account.
- The requisite balance can be maintained over your accounts and over those of your immediate family members.
In the same way, other banks also keep criteria for maintaining a high balance in saving bank account. That simply means that the bank would get lots of cash to use for their own business and naturally they can treat these customers very well. Check out this survey on the best banks in India.
Facilities provided to Priority Banking Customer
A Priority banking customer has few advantages over normal customers and gets more features. Some of the most common one’s are
- Separate queue for in the bank so that you don’t wait
- No charges on NEFT and RTGS transactions through Net banking
- Free “At Par” cheque book payable at any Bank branch across the country, so you do away with the need to ask for demand drafts
- Charges waiver for DD cancellation, Cheque return, Duplicate statement charges, Demand Draft Charges, Discount in Locker Charges,
- Cheque pick-up facility
- No charges on balance inquiries and cash withdrawals if you transact on Other Bank ATMs in India.
- Many other benefits
- Premium Credit Cards
However, all this is not so real and true
While banks list down these facilities on their website, on the ground level – there are many real-life customers who say that at the end of the day, you never get what is promised from these banks. There are a lot of things just on paper. Most of the banks just use the Preferred banking route to attract high net worth customers and finally end up calling then for investment products. A relationship manager keeps in touch with you (the target), he has all the information on how much money you have and when money comes and goes out of your account.
Here are 2 real-life experiences related to Priority banking from our questions and answers forum. Hope you get some good ideas from it.
Case 1 – Yogesh Shares his experience
There are no major benefits for being Classic or even Priority customer except some savings in NEFT charges and cheque book requests. I was HDFC classic customer for last 10 years. Around 9 months back they changed my status as Priority customer without taking a consent from me (same reason..as I opened some FD the bank) I just received letter that I am now Priority customer.
I did not notice any big difference of status being Classic or Priority customer.
The facilities they have are actually only on paper. Despite of a lot of follow up locker facility when one new branch had recently started and lockers were available, I did not get it. I was told to take some Young star policy in case I want locker. I denied this condition and the result was they did not allocate locker to me. So 50% discount is on paper. In last 10+ years I even did not meet personal banker for more than 5 times. My experience is personal banker keeps on changing periodically (on an average 2 years for each PB) and sometimes you need to trace who is your PB !
Question one may ask why I am still continuing with HDFC bank as classic customer. The simple reason is the bank is closer to my residence and with very less crowd.
In the last month I broke my FDs because of some reason and immediately they put my account into ‘Others’ category and again without informing me ! I could know that after they started charging me for account statement, signature verification/wife’s name change for mutual funds, NEFT transactions etc. So now I have instructed them to update my account as to ‘Classic Customer’ status as I still meet those criteria. Important thing to note…my Personal Banker did not take action immediately this time. That person told me s/he will forward my request to relevant department. Also at the same time this Personal Banker asked me to send request to know new Personal Banker !
Case 2 – Ayush Shares his experience
In my opinion there is no harm in being a Priority or privilege customer and using benefits offered by the bank (if they are of any use to you and are saving you time and money)
The main drawback here is, your name will go into their database as a customer with more money than some (or say lot) of others. This may result in some unwanted call such as credit card / loans / insurance or other banking products. When it comes to the actual banking needs there is nothing big that you will get. The relationship manager may keep calling you with information on new products.
My personal experience being a classic customer with HDFC is not so encouraging when the genuine banking needs are there. For example, I requested that I need a safety locker in HDFC branch but just like other customers I am on waiting list. In case I am lucky enough to get a locker, I have to pay only half the annual fee but will I get a locker is the question, that remains. You can save a few Rs. by saving on DD charges (to a certain limit), NEFT charges etc. but nothing big.
I am continuing just because I have all my banking /investment etc through HDFC and do not want to change and this classic banking is an added thing on to that account.
Conclusion
Most of the people have very basic banking needs, especially after Internet banking and mobile banking has arrived, your dependence on cheque books, Demand Drafts, and any physical visits to banks has reduced. For most of the people, anyways banking is just a small part of their financial life and they get most of the facilities and what they need from their basic banking account only. For them, it does not make a lot of sense to apply for priority banking . However, there are many investors who are heavily into banking due to personal reasons or for their professional needs. For many of them, few features which come with Priority banking might mean a very big thing. If you are one of them, just see how much of it will be eventually used by you and then take a call.
What do you think about it? Would you like to become a Priority Banking customer or not ?
I agree with Yogesh, I also have same issue they don’t give locker and try to sell the insurance before allotting locker etc etc PB don’t sit in the same branch as our home branch. Branch don’t like PB at all lot’s of differences in their opinion and treating customers etc….
Thanks for your comment RajeevKemani
As someone above rightly mentioned, its not the Bank, but its the people who serve you.
There are RM’s with good intent and then there are the lazy, lethargic people who pretend to serve you.
All in all, every institution has rules, it depends on a person who explains it to you and the way they make you feel about the institution.
Thanks for your comment statedspy
Even I applied for Saving Account in SBI, my “first” experience was “LIKE Hell” when i entered into the Bank and that queue for opening account, it was like everyone is asking for “FREE” Service. “Itna footage to PM bhi nahi khate honge jitna wo Banker answer dene m kha rahi thi”. Thats why i decided to move on, “Chalo Yes Bank Chalte hai, Ghar se docs. le ke jaega”
Then i guy over thr (Banker), Dont know why but i asked him abt my query. “Trust me, He make me realise Govt bank m sab Bure nahi hote” and they offered me to become Privilege Customer.
Formality was just to pay more deposit. I accept the same.
Then he introduce me to the same “Aunty”. She offered me to have a seat. Khud form fill kia unhone. Within one day i become an Account holder of SBI.
Lets see what are the other benefits of the same…!!!
Thanks for your comment KIARA
I think jagoninestor only sees loop holes in all fields..Come on..write loop holes on the roles of Collectors,politicians,Doctors who also rob the money…Iam from IIM Kozhikode…Iam, working as Brand manager in a tp private bank.
Thanks for your comment Dinesh
I am Malleswara Reddy using Axis Bank priority account from 5 years. They mainly focus on their business promotions like forcing us to take additional accounts, insurance, deposits,….
I gave them number of applications to my family accounts and also demat account. But it never happened, in fact they were kept on charging on those accounts. No use, though I sent so many mails and personally met.
I personally do not suggest Axis bank priority because of their worrest service.
Thanks for sharing that Eshwar
Hello Everyone,
Am Srikrishna. I do hold a HDFC account for the past 8 years and I had a very good experience, until last month, when i changed my address details and bank branch details to Bangalore, Basveshwaranagar branch. When I was in Chennai I had got a very professional PB and he was so very helpful. I had introduced all my family members as well in to classic banking.
The bad fate came when i got transferred back to Bangalore and when I changed my address and branch to this Basveswaranagar, Bangalore.
The PB i got here was a very cunning person and he was and he is still only for his benefit and for his own incentives. He is never a person who like to help customers. He had given me all bullshit and false promises and screwed my happiness and good mood.
Its not the bank which is a sick thing, It all depends on the PB whom you get. Never go by the PB words at any point of time. Let the PB tell his bullshit, hear all the same and each and every customer should take the final decision by himself. Also we should take a decision exactly opposite to which the PB suggest and which will help us and benefit us. Majority of the PB`s will give only bullshit as they are there to just work for their own benefits and incentives.
Hi Srikrishna
Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also
Manish
I’ve been a Preferred Customer of HDFC Bank for 2 years now and my experience has been really good. I will elaborate some of the experiences below.
1. I got a Preferred account because my mother had a Preferred account and she introduced me. Hence, I did not have to go through all the time consuming formalities. The banker asked took a photocopy of my Driving License, uploaded it onto the system, asked me to sign in a few places on a form and he filled in the rest of the necessary details.
2. For a card, since I was now a Preferred customer, he told me that I could start off then and there with an ATM card, Internet Banking and Phone Banking. I was surprised. He gave me a kit that contained a card with a number instead of a name(for a few months I felt like I was a Swiss bank numbered account holder, until I lost the card :P), and details for the rest, all of which would be tied to my account shortly.
Steps 1 and 2 were completed in about 30 mins. Felt good.
3. I checked out the Internet Banking portal and found that I could do most of my transactions online. The portal was fast and easy to use and I could use NEFT as much as I wanted without charges. Similarly, the mobile banking app for Android was amazing. Both these online services stand second, only to SBI, which is both fast and completely hassle free.
4. My happiness did not last long however. My wallet got stolen and I lost my ATM card (Swiss bank, poof! ). I called them up and blocked them. Then I went at my leisure to the bank and told them this problem, while mentioning that I was a Preferred Banking customer. They immediately gave me a form and asked me to sign in a place. I requested for a MasterCard this time, which they made a note of.
In a week, the card arrived at my doorstep, with the PIN mailer arriving a few days later.
No extra charge for replacement.
Felt good again.
5. One day, I was fooling around on the Internet Banking portal and was going through the various cards. I noted that mine was Platinum and that there was another called Platinum Chip. Just for fun, I clicked on apply, and without further authorization, it said that my application would be processed.
One more week and Voila! I now have the Platinum Chip debit card.
No Extra Charge.
Now for some of the small things that make a big difference.
6. No fuel surcharge of 14.05 on every purchase I make at the local petrol pump. Basically, how this works is that the fuel surcharge gets debited on that day but gets reversed by the end of the month. Gee! Feels extremely good knowing that you don’t have to pay this 2.8% surcharge every time.
Finally, for the icing on top of the cake.
7. No extra charge on withdrawals from non-HDFC ATMs, beyond the monthly limit.
And now I have to carry almost no money on my person.
I’m a happy Preferred Banking customer 🙂
Hey Gregory House
Thanks for sharing your experience with all of us. It was a great learning.
Manish
Thanks a lot to everyone who shared their experience and thanks for writing a very good article and with the help of all the commentators, showing me what it is like. I am thinking of making some investment in the form of deposits and I am just looking for a good bank that provides good priority banking services.
1. As so many people mentioned, with the online banking, phone banking, most of our needs get fulfilled very comfortably without even having to go to the branch. Due to reduced use of checks and comfortably buying most stuff online, transferring money online, I almost never use checks and sometimes when I do, signature problems occur.
2. Basically, the smartphone app, online banking, Debit- ATM cards are far more superior than the RMs and cooperative staff. I remember it well, how banking used to be 15 years back.
3. I have to buy some deposits anyway, so I will naturally get preferred or priority banking in some bank, but I am looking for one which really provides good service. RM has to be super supportive and banking anywhere in India should be very good and I should be treated as a preferred customer all across the nation. This is what I expect from Priority banking, but I am sure, most banks would not be providing good enough services, but proper dealing from the RM will also be good enough. Currently, I have a gold privilege account in ICICI and it is just a normal account. Everybody at the branch is a privilege customer, but the only thing is they deal with the customers over the counters where you can sit and get the things done which is Ok.
4. I need the following,
i. A good RM who can help me get things done really fast, who stop selling me investment plans after being told once.
ii. I can go to the branch directly and receive the check book, new ATMs, Pins personally rather than having to wait for a week or two weeks.
iii. Help me with getting the drafts made and if sometimes, signature do not match on the cheque, he informs me about that.
Where will you guys suggest me to open an account with. I already have one with ICICI as a privilege, but as I am saying, everybody is a privilege customer and there is no RM appointed to help me with the banking needs. There is a guy who I know personally and he will help me out with things when I need, but he was the guy who opened my account. So, he is not an RM basically. I have not been given any number of a dedicated RM who will take care of my banking needs and provide me with the best possible services.
Overall, I understand that the concept of priority banking is not such a big deal looking at the minimum balance requirements and stuff.
I am thinking of opening the account with HDFC, but being little unsure whether they will be able to provide me with the services I am looking for. I do not want to regret later.
Thanks for sharing points in detail . I personally dont know any other bank than ICICI ! ..
Okay. I would like to continue sharing my experience through this comment. I have gone to IDBI and Kotak Bank for the Preferred account in IDBI and Privy league in Kotak. As of now, the staff has been helpful and they are personally taking interest in getting the paper work done as I have told them about the deposits that I have to make.
My IDBI experience,
1. Staff is supportive, but processes are not super fast and consume the normal time.
2. They are equally or maybe more interested than me now that I open an account with them. Afterwards, I do not know about the services, but hopefully, they will be good and I will always meet the RM who will take care of my needs quickly.
My Kotak experience,
1. Response from the staff was super good initially. After filing all the papers, the RM was a bit not good. He did not pick up the phone and just sent me an sms telling that My A/c is in process which was not enough, so I responded a little harshly saying just don’t open the account as I am yet to add funds as I told them I am going to do an RTGS once you give me an account number. So another executive called up and apologised. Now, she said my A/C has been opened and she will mail me the details on my email address while quoting the email address.
So far, alright, but I am still waiting for the mail and intimation from the Bank about opening of my A/c.
One nice thing that I like about Kotak Privy is their Card lost Insurance coverage for upto Rs1 lac. There is nothing like that with the IDBI.
1. Processes do take as much time as they normally do.
2. Staff is supportive overall.
Overall, what I understood about Priority banking. It’s not something really important. The thing is, if you have got some money to put in the bank. You can avail a little benefits.
Thanks for sharing your experience
Hi Manish,
is it good to go with icici privilege banking ??
Need your suggestion
Thanks
You can go for it, if you have higher banking needs. I personally have it, and I dont find much difference for my banking compared to not having it . But if you dont have anything to loose, you can go for it !
Thank You very much for sharing your valuable experiences on this site.
now I will CANCEL the plan of opening Account at HDFC.
Thanks
I am a Premier Customer of HSBC. I don’t get carried away by ego boosting tactics of staff as I do most things online. But I am looking for what best I can get out of their plan. Some smart things I could do were;
1. Got International Credit/Debit card which I used on my trips abroad. Free airport lounge service in Mumbai/Delhi.
2. When I was a resident abroad I got a local credit card there as was assigned a RM abroad.
I could use airport lounge abroad free.
3. My son who was a student in US was also issued with a local credit card with 8000 $ limit with a local RM. That was very useful for him.
4. International remittances to or from abroad hassle free.
5. Credit card offers in India and abroad (some save good money like Make my trip etc.)
I think some of the above features are good.
Thanks for sharing that Sundaram !
Hi Manish, I have two savings accounts. One with HDFC Bank and and one with SBI. I use one account for savings and investments and the other one for daily expenses. Sometime back i made some fixed deposits greater than 15 lacs in HDFC Bank and they converted my account from regular to Preferred without taking a consent from me. Now i am thinking of deraising the account to regular. Should i do it or should i wait till i have the FDs with the bank? Any suggestions will be helpful.
Ask them simply to degrade you to normal account holder !
God,
Save me from a Bank like the HDFC!
HDFC Bank is the worst. I have had a horrible exprience with them. They sold a ULIP to me saying it is a very good product & please buy it as it the last day of it being sold.( So that you don’t study it ) Please sign on an empty form.
and they had put a gun on your head to do this ?
No, they did not put a gun on my head. I did all of myself.
I HAVE ENJOYED EVERY BIT OF COMMENTS APPEARING ABOVE.I AM A NRI AND HAVE GOOD/BAD EXPERIANCE TOO.
WITH OUT MUCH ELOBRATION I WOULD LIKE TO PUT FEW FACTS FORWARD:
1.SBI NRI BR AT MUMBAI IS A FAIR PSU BANK AND RM/Br MNGR ALL ARE PROFESSIONAL AND UNDERSTAND THE BANKING AND LIMITATIONS OF NRI CUSTOMERS.AM SATISFIED WITH QUALITY AND QUANTITY OF SERVICE.MOREOVER NET BANKG IS SOLID AND HIGHLY RELAIABLE.
2.CITI BANK BAHRAIN:ALL LIP SERVICE AND IF YOU ARE NOT 7DIGIT CUSTOMER YOU WONT GET A SMILE EVEN.SOLID NET BANKING PLATFORM AND SECURED.
3.ICICI BANK:HIGHLY IN EFFICIENT BANK,OVERSMART STAFF,YOU NEED TO EXTRACT DESIERED SERVICES OUT OF THEM(DANGLE CARROT OF FD/MF/SH/USD FD ETC) AND GET THINGS DONE.OVERALL MOST OF THEM ARE DISHONEST,DO NOT KEEP PROMISES. 2 YEARS AGO TWICE THEY WANTED ME TO PROMOTE TO HNI/PLATINUM CUSTOMERS.I POLITELY REFUSED.I AM GETTING WHAT I WANT BUT WITH DIFFICULTY.
CONCLUSION:PSU BANKS OFFERING PLAIN VANILLA SERVICE IS BEST AND RELIABLE.ALL PSU BANKS ARE OFFERING INTERNET BANKING AD THATS SUFFICIENT FOR MMOST OF CUSTOMER.
REGARDS
VIKRAM GAJJAR
Thanks for sharing your experience !
Nice article with thoughtful insights.
I am a NRI Imperia customer of HDFC bank supposed to be one notch higher up than preferred. The info on the bank website promises to provide an ‘amazing’ services and highlights the uniqueness of being bank’s customer to experience such a royal treatment.
Alas it is limited to only website info. I am a long term customer of HDFC bank and given a tremendous business to them and on few occasions that I walk into the any branch during my India visits, I come out shaking my head with horrible & terrible handling of my requests.
Worse, many of the branche staff do not even understand my profile of customership and am treated in the same way as like any other regular customer even while I highlight my relationship. For the bank staff, everyone is like tom, dick and harry. They do not care anyone. Walking into the branch, I had to go through one such bad experience today. I made a promise not to walk in to any HDFC bank branch anymore.
The only silver lining is good RM. At least they did not change the RM in last 3 years. May be it is RM’s attitude and personal behavior gone well with me rather than banks promise of special services through RM channel. 3 Years ago during the first call of RM, some freebies were offered to me. I just told to process my service requests promptly and swiftly with all seriousness and not keen on any bank favors. It worked well and never got any sales call.
What hurts me is banks promises to give special privileges to certain customers on website and these customers walk into the branch believing those write-ups and comes out bad taste in mouth.
True .
As I said, its just a way to keep a list of HNI and try to make most of the business. Thanks for sharing your experience !
I was priority customer with axis bank and for last few years I am wealth customer. It looks like as type of account is increasing the response I get from the bank is getting poorer. Every time I have to send a few reminders to get proper response. I am waiting for locker since 3years. Whatever the good response I get is from the personal rapo developed with a few staff at the branch. RM is hopeless. once they know that if you are not going to invest in MFs or insurance they can’t care any less.
Yes, if you are visiting some other branch, the initial receiving may be good, but wont be any tangible benefit. Last year during my India trip, my debit card was not working and I didn’t have cheque. Bank would not let me withdraw any cash. I was stranded without money for nearly 10days until getting cheque book. I can keep ranting…in nutshell..I haven’t seen a single benefit so far.
Thanks for sharing that with all of us . That shows some real life experience !
Hi Manish,
Normally you have a tendency to hit the right chord of the site visitors and you did it again with this simple yet effective article.
I have a classic account with HDFC for a long time. Today I came to know about the fee waiver on using debit card at other banks ATM. I discussed this with my Personal Manager, he apologised and assured me that the charges will be reversed. Yes it seems that they faulter and earn on our ignorance. But it is our duty to be alert about our money and demand the facilities offered. I am banking with HDFC, ICICI, IDBI, PNB, BOB and an Urban Co-operative bank.
My personal relations have assured that any problem with the cheque (sign or low balance) first gets notified to my Personal Banker, who give me a call and ask me before he rejects it. This issue with cheque has happened with ICICI, HDFC and very recently with the co-operative bank who called me before dishonoring them!!! These days anyways the banks are giving only 8.75% returns on FDs. It is must that depending on the risk profile the relevant amount must be invested in Corporate FDs giving as high as 9.5-10.5%……
Thanks for sharing that Mayank
Even I have preferred banking with ICICI (without asking) and I too get call before they reject my cheque !
Dear Manish,
I think you also need to look into the positive aspects of the Preferred Banking in a major branch. I have all of my family accounts with one such HDFC bank & also in a neighbouring Bank of India. In HDFC bank, I am a “Preferred Customer” & in the BOI, I am a “Diamond Customer”. Both the branches are equally very crowded on weekdays (~15 to 20 mins to deposit cheque, cash etc; ~20 min wait for locker, ~20-30 mins for DD etc; like a typical bank). I have experienced both the “aam aadmi” way & “Preferred” Banking. The difference is night and day. The Preferred Lounge is on a separate floor and away from all the noise and pushing downstairs. Any business in the bank involves just walking to your RM and rest gets taken care of within a very short time while you can wait in the lounge. No pushing, shoving, getting kicked in shins etc while depositing or waiting for DD. Everything gets happened very quickly and its very easy to talk to the Manager in case of issue.
I used to dread going to bank earlier, but once this preferred customer started in HDFC, it has made banking much more pleasurable.
Yeah, there is a change of RM every other day; but you can approach any of the RM’s for assistance and they will pull your information immediately. And a polite decline to buy “investment products” will usually stop after 1 try.
And, oh, the 50% discount on charges, locker rental etc is icing on the cake. I rather doing my banking peacefully being “preferred” then dealing with the huge crowds.
By the way, BOI “Diamond” doesn’t do anything; you still have to be a “aam aadmi”.
Harsha
Thanks for sharing . I am not saying there are no good side of it , All we are saying is that at times it tricks customers and over promises and not required for masses
Well most of my friends knows that im pref cust so whenever any one want DD they call me so they cn transfer money in my account and i can make DD so there charges are saved.
Manish
And lets say I am income tax department telling you after 3 yrs that all these years you took your payments this way and not paying tax on this money . What will you tell me and PROVE it ?
Manish
Awasthi,
You need to be careful here. Tax authorities may ask you to pay tax on the ‘gift’ you receied from friends (as they would have transferred money to you). You may not have proof to show that you had returned the money back to them (DD is given to some other party !!). It is better to avoid these issues as you do not save too much, but could get caught in unnecessary issues.
Regards,
Bhushan
Hmmm Nice suggesstion . Will stop doing this.