Public sector banks and five major private sector banks, including Axis Bank, HDFC Bank, IndusInd Bank, ICICI Bank and IDBI Bank, collected over Rs 35,000 crore in charges since 2018 on account of non-maintenance of minimum balance, additional ATM transactions and SMS Services, Finance Ministry informed the Rajya Sabha on Tuesday.
Minister of State, Dr Bhagwat Karad pointed that these banks collected over Rs 21,000 crore on account of non-maintenance of minimum balance, while over Rs 8,000 crore was generated due to additional ATM transactions, and SMS services added over Rs 6,000 crore.
Banks impose charges for several reasons including not maintaining the minimum balance in an account, surpassing the number of free ATM transactions, depositing cash beyond a limit, among others.
Maintaining minimum balance, often referred to as average monthly balance (AMB), is one of the key requirements in case of many banks. This necessitates customer to uphold a certain amount in their accounts every month, failing which they are required to pay penalties to banks.
Steps undertaken by the government for affordable banking services:
In his reply, Karad pointed that the Government and Reserve Bank of India (RBI) have taken various steps for availability of affordable banking services to the poorest sections of the society.
As per extant guidelines of RBI, following basic minimum facilities are being provided under Basic Savings Bank Deposit Account (BSBDA), including accounts opened under Pradhan Mantri Jan Dhan Yojna (PMJDY) for common people free of charge and without any requirement for maintaining minimum balance in the account:
1. Deposit of cash at bank branch as well as ATMs/Cash Deposit Machines (CDMs).
2. Receipt/ credit of money through any electronic channel or by means of deposit /collection of cheques drawn by Central/State Government agencies and departments.
3. No limit on number and value of deposits that can be made in a month.
4. Minimum of four withdrawals in a month, including ATM withdrawals.
5. ATM Card or ATM-cum-Debit Card.
Further, in order to regulate the charges levied by the banks, RBI has issued Master Circular on “Customer Service in Banks” dated 1st July, 2015 which provides that banks are permitted to fix penal charges regarding non-maintenance of minimum balance in savings account, as per their Board approved policy, while ensuring that all such penal charges are reasonable and not out of line with the average cost of providing the services, the Finance Ministry pointed.
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