The ban on mortgage early-termination fees and on reductions in exception fees left banks with almost no growth in fee income over the past year.The Reserve Bank of Australia reported yesterday that total domestic bank fee income grew by 0.7 per cent, to A$11.3 billion, in 2011. The RBA report is based on data from 17 banks, which account for 90 per cent of the market, and covers their 2010/11 financial year.Fee income from households declined, while income from businesses rose, particularly fees for loans and bill facilities.Banks' fee income from households declined seven per cent in 2011, to around $4 billion. This was largely a result of a decline in fees from deposits and from housing loans.The big drop has been in deposit fees, which fell 13 per cent in 2011. The main influence on this change was a dramatic reduction in exception fees - down 42.5 per cent, from $299 million in 2010 to $172 million in 2011.Fees on housing loans fell by 11 per cent. Much of the decline was due to lenders cutting early termination fees, which were banned from July 1 last year.Since 2009, when fee income from households was $5.2 billion, bank fees paid by households have fallen 23 per cent.The only segment for which fee income from households rose in 2011 was credit cards; fees rose four per cent to $1.3 billion. The RBA said this was largely due to the increase in the number of cards on issue; unit charges were "little changed".Fees paid by businesses increased by 5.5 per cent in 2011 and by 19.7 per cent over the two years from 2009. Fee income from businesses in 2011 was $7.3 billion.The RBA said most of this growth came from fees earned on loans and bank bills, and occurred despite a slight fall in lending to businesses over the year. Fee income from bank bills rose 23.2 per cent in 2011. The RBA said: "The increase in fees on these facilities was largely due to the repricing of establishment fees and line fees. The ongoing repricing reflects banks re-evaluating the credit and liquidity risks associated with these facilities."Fee income on business deposits fell three per cent, despite business deposit balances increasing by 15 per cent."As with household deposits, banks have been competing vigorously for deposits from the business sector," the RBA said.Merchant service fee income rose 3.9 per cent, which the RBA attributed to higher card transaction volumes.