National Australia Bank will abolish monthly account service fees on some of its accounts - in a move that has prompted Treasurer Wayne Swan to call on other banks to follow suit.
NAB today said it would abolish the current $4 and $5 monthly account service fees on its Classic and e-Banking personal transaction accounts from January 22, 2010, and scrap the monthly account service and transaction fees on 10 other unspecified transaction and savings accounts from that time.
The bank will also abolish the over-limit fee and cut late payment fees on all credit cards by $25 to $5 from December 4.
Mr Swan welcomed NAB's move to lower some of its fees and charges. He said other banks should follow NAB's lead - and consumers should shop around for the best available deal.
"I think it lays down the gauntlet to all of the other banks to reduce their fees and charges," Mr Swan said.
"So they’ve set a good example here. Let’s see some of the others follow ... There’s no doubt there’s a far better deal on fees and charges out there from one bank today," he said.
Fee cuts
Personal banking group executive Lisa Gray said there were no strings attached to the fee cuts and more than 860,000 NAB customers would benefit from the decision.
"Today's decision is final. There are no disclaimers and we won't be recouping these fees anywhere else," she said in a statement today.
The move means the only remaining personal transaction account with a monthly account service fee would be NAB’s premium gold banking product, the bank said.
"There is no asterisk, no disclaimers and no rule requiring customers to make a minimum monthly deposit," NAB said.
NAB estimates it will lose $110 million in revenue per year from these changes, which come after the bank scrapped its $30 overdrawn account fee on personal accounts last month.
But NAB will not be changing its fees on automatic teller machines, Ms Gray told journalists.
NAB's direct charge for non-NAB customers is $1.50 for a cash withdrawal or advance, and 50 cents for a balance inquiry.
Banks act
All of Australia’s big four banks have announced reductions on exception fees on personal accounts, but some reductions have yet to take effect.
NAB’s abolition of its $30 overdrawn fee on personal accounts was brought forward to September 1. Commonwealth Bank’s reduction to exception fees came into effect on October 1.
ANZ Banking Group said it would scrap exception fees only for recipients of government benefits and reduce overdrawn, dishonour and over-limit fees for all other customers from December 15.
NAB gained new customers after abolishing its overdrawn fee, Ms Gray said.
She said NAB’s decision would give the bank a competitive advantage over its rivals.
"This is about making us more competitive," she said.
NAB has no intention to recoup the fees, which has consistently added $110 million to the bank’s top line revenue in recent years, she added.
"There is no hidden agenda here or fine print," she said.
NAB is also reviewing fees for all business customers and will announce its decision this year, she said.
AAP
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