Mumbai: Even though RBI has hiked rates on savings accounts and is desirous of deregulating them, which has the potential to push them further, cheer for account holders could be short-lived as banks are likely to make them pay heftily for services to offset the costs, bankers and analysts have said.

Earlier, the regulated interest rates of 3.5 per cent per annum - unchanged since 1993 - helped banks garner low- cost deposits and maintain good margins due to which many services came free.

But, with RBI action to hike it to 4 per cent and its articulated bias towards deregulation in a discussion paper posted for comments, there is a high likelihood of customers being asked to pay transaction charges, bankers said.

"The transaction charges will go up for the consumers if the rates on savings bank accounts keep on going up...the banks also have to survive," HDFC Bank Managing Director Aditya Puri said.

Among various actions which banks could take will be charges for non-maintenance of minimum balance, raising the minimum balance requirement, increase in cheque issue charges and a limit on the number of free transactions, rating agency Crisil said in a note.

Fearing that competition for low-cost savings deposits will drive up the rates and affect margins, a majority of lenders have voiced reservations about deregulation till now.  "The pressure on net interest margins is likely to further increase if the RBI deregulates savings account deposit rates,"

Crisil said. Central Bank of India Chairman and Managing Director S Sridhar said that deregulating the savings bank interest rate is "premature" as lenders need higher margins to make up for ‘inefficiencies’ in the system.

Elaborating, Sridhar said banks have spent a lot on technology in recent years and need to recover the cost.

Besides, they also have to allocate money towards mandatory requirements such as financial inclusion, opening branches in rural areas, among others, he said.

"Levying of transaction charges is a trade-off," he said, drawing attention towards the banking operations in the developed world where every service is charged.