I have accounts with both Axis Bank and HDFC Bank. For a failed EMI payment, which of these two banks charges a higher penalty?
While both banks have high penalties for a failed ECS/NACH transaction, HDFC Bank charges a higher amount for repeated failures within the same month due to its escalating penalty system. For a single, one-off failure, the charges are very comparable, with Axis Bank’s flat rate sometimes being slightly higher than HDFC Bank’s initial charge.
The Different Penalty Structures of HDFC and Axis Bank
I was discussing this with my financial advisor, and he pointed out the key difference in how these two banks approach penalties. He explained that HDFC Bank uses an escalating, tiered system, where the penalty amount increases with each subsequent bounce in the same month. In contrast, Axis Bank generally uses a high, flat-rate system, charging the same amount for every failure.
Comparing the Charges for a Single Failure
My friend recently had one SIP fail in his Axis Bank account and was charged a penalty of ₹500 + GST. His brother, who had a similar single failure in his HDFC Bank account in the same month, was charged a slightly lower ₹450 + GST. This showed that for a single, isolated mistake, Axis Bank’s penalty can be higher.
Where HDFC Becomes More Expensive: Repeat Failures
The situation changes if you have multiple failures. Another colleague had three different auto-debits fail in his HDFC account in one month. His first penalty was ₹450, his second was ₹500, and his third was ₹550 plus GST. The total penalty he paid was significantly higher than what he would have paid at Axis Bank, where each of the three failures would likely have been charged at the flat rate of ₹500 each. This is where HDFC’s system becomes stricter and more expensive.
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