The Reserve Bank of India (RBI) has told banks not to charge more than Rs 5 for any cash deposit made at a non-home branch (other than the one where the customer has the account).
Some banks charge as much as Rs 110 for such cash deposits.
In 2008, RBI said the charge for a transaction under the National Electronic Fund Transfer (NEFT) up to Rs 1 lakh should not exceed Rs 5. Now, the regulator says cash deposit charges should be in line with NEFT charges.
The central bank generally refrains from specifying interest rates and charges. However, it has acted where it feels banks are being needlessly stubborn or unfair.
Last year, RBI had mandated a fixed charge for cash withdrawal from third-party automated teller machines, beyond the five free transactions. Banks used to charge customers as much as Rs 55 for cash withdrawal from other bank ATMs.
RBI feels since banking is a highly regulated service industry, with very stiff entry norms, customer service cannot entirely be left to market forces. It is the regulator’s duty to protect small customers.
To review customer service in banks, RBI recently set up a committee under former Securities and Exchange Board of India chairman, M Damodaran. It would look at the range of services offered to retail and small borrowers, including pensioners, and suggest a mechanism to expedite grievance redressal. Its report is to come next month.
