reasonableness of service charges
05 Feb 2007
Mumbai: The Reserve Bank of India (RBI) has listed points of action for banks to ensure fair practices in banking services and reasonableness of bank charges.
The RBI has advised banks to identify the basic banking services on the basis of broad parameters indicated in the report of the working group set up to formulate a scheme for ensuring reasonableness of bank charges.
The working group report has suggested that services that are ordinarily availed by individuals in the middle and lower segments will be the first parameter.
These will comprise services related to deposit / loan accounts, remittance services and collection services. Banks charge customers separately for these services when these transactions occur in different delivery channels.
Some of the banks bundle out products and services to customers as a composite offering and do not levy charges on each individual product or service.
RBI has advised banks to ensure that basic services are made available to users at reasonable prices and towards this, the basic services should be delivered outside the scope of the bundled products.
Banks should also inform customers in all cases when a transaction initiated by the bank itself results in or is likely to lead to a shortfall in the minimum balance required to be maintained, RBI said.
However, the list is indicative in nature and banks may, at their discretion, include additional services and treat them on a separate footing, as they may consider appropriate, for the purpose of pricing, RBI said.
