Top private banks and PSBs have received fines totaling more than Rs 35,000 crore since 2018.

The Finance Ministry informed the Rajya Sabha on Tuesday that public sector banks and five significant private sector banks, including Axis Bank, HDFC Bank, IndusInd Bank, ICICI Bank, and IDBI Bank, have collected over Rs 35,000 crore in fees since 2018 due to non-maintenance of minimum balance, additional ATM transactions, and SMS Services.

Dr. Bhagwat Karad, Minister of State, noted that these banks earned over Rs 21,000 crore owing to failure to maintain the minimum balance, while SMS services brought in over Rs 6,000 crore and extra ATM transactions produced over Rs 8,000 crore.

Charges by banks:

Banks impose fees for a variety of reasons, such as failing to maintain the required minimum balance in an account, using up too many of your allotted free ATM transactions, or depositing too much cash.

One of the essential criteria for many banks is to maintain a minimum balance, often known as average monthly balance (AMB). Customers must maintain a certain balance in their accounts each month in order to avoid paying fines to the banks.

Government initiatives for accessible financial services:

In his response, Karad emphasised the initiatives that the Government and Reserve Bank of India (RBI) had done to ensure that the lowest segments of the population could access cheap financial services.

According to current RBI regulations, the Basic Savings Bank Deposit Account (BSBDA), which includes accounts opened under the Pradhan Mantri Jan Dhan Yojna (PMJDY) for ordinary people without charge and without the need to maintain a minimum balance in the account, offers the following minimal basic facilities:

1. Cash can be deposited at ATMs and Cash Deposit Machines (CDMs) as well as bank branches.

2. Receiving or crediting funds via any electronic channel, or by depositing or collecting checks drawn on Central or State Government departments.

3. There is no cap on how many and how much money may be deposited in a single month.

4. Four or more withdrawals, including ATM withdrawals, at least once every month.

5. An ATM card or an ATM combined debit card.

Additionally, in order to control the fees

Further, the RBI issued a Master Circular on “Customer Service in Banks” on July 1, 2015, to regulate the fees charged by banks. The Master Circular states that banks are allowed to set penalties for failing to maintain a minimum balance in savings accounts in accordance with Board-approved policy, as long as those penalties are reasonable and in line with the average cost of providing the services, the Finance Ministry noted.