Govt to take up with RBI penal charges imposed by bank

New Delhi, Aug 27, 2023

The government is expected to take up the issue of penal charges levied by banks for non-maintenance of minimum balance with the Reserve Bank of India, as these yielded Rs 21,000 for state-run and private lenders over the last five years.

While a government official insisted that state-run banks such as SBI do not adopt such practices, he acknowledged the problem and said the issue will be taken up with RBI. The RBI has tightened norms over the last few years after freeing charges and interest rates. It is also seeking to get banks to undertake some rationalisation as some of the charges are seen to be exorbitant with account holders often being unaware of them.

Data shared by the government in Parliament recently estimated that between 2018 and 2023, banks mopped up over Rs 35,500 crore through penalty on non-maintenance of minimum deposit, SMS and additional transaction charges. The official said the government is also seeking to improve the performance of debt recovery tribunals and a consultation exercise has been undertaken.

The finance ministry is, however, unlikely to provide additional capital to state-run general insurance companies this year, said the official, who did not wish to be identified.

[The Times of India]