Nedbank is the third bank to start charging customers an overdraft facility fee as banks hasten to fall in line with banking regulations.
According to the Basel II Accord, banks are required to hold capital against approved credit facilities.
This means that you will have to pay a monthly fee for your overdraft facility, regardless of whether you use it or not. In terms of the National Credit Act, from June 1 the maximum initiation fee for overdraft facilities will be R150 per agreement plus 10 percent of the amount of the facility over R1 000 and the fee is capped at R1 000.
The maximum monthly facility fee will be R50.
Nedbank has decided to waive overdraft facility fee charges until the end of July and informed clients of the changes this week.
"We wanted to give clients the chance to decide if they want to reduce their overdraft facility or cancel it altogether," says Saks Ntombela, the managing director of transactional products.
You will pay R5 a month for an overdraft facility of R5 000 and less; R10 a month for a facility between R5 000 and R10 000; R15 a month for a facility between R10 000 and R50 000; and R15 a month for facilities higher than R50 000.
However, if you use Nedbank's private or personal banking service, with a personal banker assigned to your account, you will pay the following:
R20 a month for an overdraft of R10 000 and less; R30 a month for an overdraft between R10 000 and R50 000 and R50 a month for an overdraft of more than R50 000.
Small businesses will pay a flat fee of R50 a month for their overdraft facilities.
The overdraft facility fees will, however, not apply to Nedbank's Everyday account, Go Banking or BOE clients.
In order to reduce or cancel your overdraft, you can contact the Nedbank customer helpline on 0860 555 111 or visit your bank branch before July 31.