Bank of Baroda withdraws order reducing free cash transactions

State-owned Bank of Baroda has reversed its decision to reduce the maximum number of free cash transactions every month, the finance ministry said in a statement on Tuesday.

The finance ministry came out with a statement following “several media reports alluding to steep increase in service charges by certain public sector banks.” It stated that among the state-owned banks, only Bank of Baroda had decided to lower the cap on free cash deposits and withdrawals from 5 to 3 in a month. There was, however, “no change in the charges of transactions in excess of these free transactions,” according to the finance ministry.

“Bank of Baroda has since informed that in the light of the current Covid-19 related situation, they have decided to withdraw the changes. Further, no other PSB has increased such charges recently,” the official statement said.

The government said that none of the state-owned banks proposed to raise bank charges “in the near future in view of the COVID-19 pandemic.”

“Although, as per RBI guidelines, all banks, including PSBs, are permitted to levy charges for their services in a fair, transparent and non-discriminatory manner, based upon costs involved,” the finance ministry clarified.

With effect from November 1, Bank of Baroda had earlier said it would levy Rs 50 per deposit transaction beyond the free limit of three deposits in a month. For cash withdrawals, the charges were supposed to be Rs 125 per transaction in metro urban regions and Rs 100 per transaction in rural and semi-urban regions.