HSBC's online banking unit First Direct is to impose monthly fees on its current accounts on those who do not conform to the bank's new requirements, which include crediting the account with at least GBP1,500 a month, from February 2007.

<p>In a bid to tackle dormant accounts, a monthly charge of GBP10 a month will be imposed on those who do not pay in the required GBP1,500 every month. <br /><br />In addition to the monthly fee, a GBP25 fee will be charged to those who ask for an increase in their overdraft more than once in a six-month period, unauthorized overdrafts and bounced checks and returned payments. <br /><br />The fee can be avoided by maintaining a balance of GBP1,500 in the account or by purchasing a second product from the bank, such as a credit card or mortgage. <br /><br />An alteration in interest will also incur on First Direct&#0039;s authorized and unauthorized overdrafts to a flat rate of 12.9%, to come into effect in May 2007. <br /><br />The imposed fees have caused concern over the termination of free banking in general in the UK. However, banks including HSBC and Barclays have denied that they will be following First Direct&#0039;s example, for the time being at least. <br /></p>