NAB axes penalty fees

National Australia Bank is axing its $30 penalty fee for overdrafts on personal accounts. Last year the bank cut all three types of personal account penalties from $50 to $30.

CEO Cameron Clyne is expected to announce today that they will be abolished from October 1. The move is aimed to make NAB more competitive and may lead to other major banks being forced to follow and axe penalty fees on their accounts.

Lisa Gray, Head of Retail at NAB, said “I want to assure you this decision is final – there are no disclaimers, we will not reverse it and, importantly, we will not recoup the fee anywhere else.The benefits are not hidden – we want to be even more competitive. We want our customers to have a stronger relationship with us. It will also give customers of other banks another reason to look at NAB.”

Bank penalty fees cost Australian households $961 million in 2008 according to the Reserve Bank of Australia. NAB has the smallest retail customer base of the big four banks, about 700,000 customers, with this move expected to cost the bank about $100 million.

Source: The Daily Telegraph