According to a recent report, last year, customers shelled out $5 billion in bank fees. Due to worldwide recession, the interest rates were reduced. The customers wanted to derive benefit from the reduced interest rates. So, they shifted their loans from fixed to variable rates and thus, had to pay the fees.

In the previous year, banks made a profit of $12.7bn in total fees, according to the Reserve Bank. The Australian reveals that this profit was the result of increase in housing mortgages and business loan charges.

According to RBA data, mortgages continue to be one of the most profitable sources of income for the banks.

The money earned from home loans increased by 17%.This growth was because the banks charged the consumers for shifting their loans.

The prominent banks are reducing their charges on deposit accounts of retail customers. This move is being taken in order to acquire market share from their competitors.

Analysts are of the view that, Australian customers could save$550m per year as four major banks have brought about a cut in the fees.

However, the banks are reported to compensate for the cuts by charging more from its business customers.