(China Daily)
Updated: 2007-11-20 07:25

By introducing the service of making deposits or withdrawals with one bank's account in other banks, Chinese banks are apparently doing a favor for domestic clients.

Yesterday, some branches of 14 Chinese banks began to provide the new service in Beijing.

An obvious advantage of such trans-bank use of one's bank account is time-saving. Instead of queuing up again and again in different banks, individual clients can now deposit, withdraw or transfer money on their accounts of various banks by joining just one queue in the nearest bank.

Another benefit is that people may no longer need to put too many bank cards in their wallets.

However, the new convenience for domestic savers does not come as a windfall. It has a price tag that can be jaw-dropping for many individuals.

The banking authorities have granted domestic lenders pricing autonomy over the new service. But the charges that domestic banks cannot wait to impose on it seem too expensive compared with the current level of returns they pay for savers.

While the country's one-year deposit interest rate stands at 3.87 percent, the charge of 1 percent for small-sum transactions, allegedly agreed by most lenders, is anything but cheap.

Domestic banks are certainly reasonable to argue that the new service will incur extra cost for personnel, technological upgrade, interbank settlement, management and so on.

Yet, the prohibitive price tag that they put to the new service betrays a disappointing fact that most of them still cannot attach as much importance to the convenience of domestic clients, or say, the quality of their service, as to their bottom line.

It will be self-contradictory to charge too much over the new service to reduce the number of potential users while claiming that this is for savers' convenience.

A strong focus on profitability, in itself, is desirable for Chinese banks most of which have just undertaken their market-oriented transformation into ingenious commercial lenders.

But that does not mean they can drag their feet over improving basic banking services for Chinese consumers while rushing to seize every chance to overcharge their clients for a new convenience.

In comparison with those international banking giants, Chinese banks still fall behind in terms of serving clients, especially the majority of domestic depositors that they cannot afford to lose.

(China Daily 11/20/2007 page10)