High service charges, mis-selling of insurance products under RBI scanner

While banks had granted autonomy to fix minimum average balance or charge for premium services

The Reserve Bank of India (RBI) would probe into “exorbitant” service charges imposed by banks and mis-selling of third-party products, especially insurance policies, during its supervisory review, RBI Deputy Governor S S Mundra said on Tuesday.

The central bank would also issue final guidelines on customer protection soon, which would limit customers’ liability in cases of unauthorised electronic banking transactions, Mundra said. Last year, the RBI had issued a draft circular in this regard.

Mundra said customers had flagged the issue of high service charges for failing to maintain minimum average balance, among other things.  

While banks had been