RBI asks banks to show service charge data

The Reserve Bank of India (RBI) today asked commercial banks to provide details of service charges levied by May 31, 2006, as it continued to receive complaints of unreasonable and non-transparent charges.

The central bank has also provided a format, listing close to 100 services,
for which banks are required to specify the charges and put it on their
websites. The central bank will put up the details on services charges
received from banks on its website.

The RBI said in a circular that the receipt of complaints is an indication that the existing institutional mechanism on ensuring fair service charges is not adequate. The directive on displaying and updating service charges in the recommended format is a step towards ensuring transparency in banking services.

In its 2006-07 annual policy statement, RBI had asked banks to display
charges at branches as part of the fair practices code and had left the
decision to prescribe service charges to the discretion of the boards of
individual banks.

Banks were expected to ensure that charges are reasonable, consistent with the cost of providing various services and that customers with low
value/volume of transactions were not penalised.

Banks have also been asked to display at their branches, information on
charges on basic banking services. These include minimum balance to be
maintained in savings bank accounts, charges leviable for non-maintenance of minimum balance, charges for collection of outstation cheques, charges for issue of demand draft and charges for account statement.