Kotak Mahindra Bank closed up 0.75% at Rs 409 on 25 June after announcing a hike in its Dynamic Currency Conversion fee to 3.5% plus GST.

DCC is simpler than it sounds. When you swipe your Kotak card at a foreign merchant and the payment terminal asks if you want the bill in Indian rupees rather than the local currency, that is dynamic currency conversion.

The bank charges a fee for handling that. It previously stood at 1% plus GST. From 1 August, it moves to 3.5% plus GST. Same service, 3.5 times the cost.

The charge kicks in across ATM withdrawals abroad, in-store purchases at international merchants and online transactions routed through overseas payment gateways.

It also covers purchases made from India if the merchant processes payment internationally. Avoiding it costs nothing.

At any terminal or checkout, whether in a shop, hotel or foreign ATM, simply choose to pay in the local currency of the country you are in. That one choice removes the DCC charge completely. No forms, no calls to the bank.

Several Indian lenders have been revisiting fees and deposit rates around the same period. Bandhan Bank raised fixed deposit rates to 7.95% for certain tenures.

IDBI Bank, SBM Bank India, South Indian Bank, Union Bank of India and Equitas Small Finance Bank have all updated their FCNR(B) deposit rates.

The RBI recently revamped the FCNR(B) scheme to lower costs for banks accepting NRI overseas deposits, and lenders have been adjusting product terms in response.

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