RBI seeks uniform service rates

Central bank asks banks to levy reasonable, cost-based charges.

If the minimum average quarterly balance in your bank account falls below the stipulated level, ICICI Bank and HSBC debit Rs 750 from your account as a penalty.

However, if you bank with the State Bank of India, the charge for not maintaining adequate balance in a savings bank account is just Rs 300.

This is not the only instance where service charges by commercial banks vary.

For instance, for every return of local cheque deposited for clearing, a customer of Canara Bank ends up paying a meagre Rs 15. Customers of SBI, however, have to pay a charge that's five times that of Canara Bank "" Rs 75.

Surprisingly, ICICI Bank charges 33 per cent lower than SBI. An ICICI Bank customer has to pay only Rs 50 for each local cheque returned.

This scenario would soon change with the Reserve Bank of India's (RBI's) activism against inexplicable charges recovered from customers by banks. The RBI has decided to take the responsibility to ensure charges levied by banks are reasonable and cost-based.

Hitherto, it was left to the banks to fix charges consistent with the cost of providing these services and also to ensure that customers with low value/volume of transactions were not penalised. Standard Chartered Bank has an unusual charge for its credit card customers. A credit card holder has to pay a penalty of Rs 99 for every payment made in cash for clearance of dues.

"The RBI is basically putting the various charges of banks to reasonability test as it feels many of the charges collected are unaccountable," said a public sector bank chairman.

Another public sector bank chairman pointed out how the RBI's financial inclusion policy is being disregarded. "Saral", HSBC's no-frills account, is full of restrictions.

Under "Saral", a customer is allowed only one free-of-cost cash transaction at a branch per month and additional transactions attract a penalty of Rs 50 per transaction. HSBC has similarly permitted only two free transactions at its ATMs per month and every additional transaction attracts Rs 10. All balance enquiries are, however, free.

"All these will change with the RBI becoming active to ensure customers' rights," said a senior banker.