Bank customers may heave a sigh of relief as the Government has asked banks to review decision to slap fine on cash transactions at branches after four free services.
According to top sources, the Government has also asked Government-owned State Bank of India (SBI) and other banks to roll back decision to penalise account holders who fail to maintain a minimum balance from April 1.
“Several banks, including three private banks like HDFC Bank, ICICI Bank and Axis Bank have also been urged to review the charges on cash transactions and ATM withdrawals above a certain limit,” the source added.
When contacted about the development, a senior Government functionary told The Pioneer, “The cash transaction issue of several banks has created concerns among the customers for which they have already consulted the banking division of the Finance Ministry. We hope the Ministry will take this issue seriously.”
The banks had recently announced that they would levy Rs 150 or Rs 5 per Rs 1,000 transaction, whichever is higher, from the savings accounts at bank branches beyond four/five times in a month. Three private banks such HDFC Bank, ICICI Bank and Axis Bank have already taken the move and started charging their customers minimum Rs 150 on deposit or withdrawal of cash from their accounts with effect from March 1.
The SBI had also made the maintenance of Rs 5,000 mandatory for accounts in metropolitan areas, Rs 3,000 in urban areas, Rs 2,000 in semi-urban areas and Rs 1,000 in rural areas. The bank has now also decided to fix separate monthly average balances (MABs) for metro, urban, semi-urban and rural areas from the beginning of next financial year.
In the aftermath of note ban, three major banks, including HDFC Bank, last week had issued a notification where it had said that its customers would only be able to avail four free withdrawal and deposit (cumulative) transactions from the banks. Over and above that, the customers, they had said, would be charged a minimum Rs 150 plus taxes and cess. Besides, SBI has also decided to increase manifold the minimum balance required for maintaining savings account from April 1, which is expected to hit more than 31 crore depositors across the country, including pensioners and students as well.
It has decided that the MAB requirement has been increased to as high as Rs 5,000 for branches in six metros. Savings bank account holders of SBI and its five associates, ever after its merger with associate banks, will have to maintain the monthly balance or else they will invite a penalty ranging from Rs 20 in rural branches to Rs 100 in metro cities, starting from April 1.
As of now, the MAB for a savings bank account is Rs 500 without facility of cheque book and Rs 1,000 with cheque book across the country. The benchmark for MAB and penalties are likely to be followed by other public sector banks. The MAB for metro branches will be Rs 5,000 and penalty for non-maintenance of minimum balance will be between Rs 50 and Rs 100.
In case of rural branches, the minimum balance has been fixed at Rs 1,000. It has also warned that breach of MAB will attract a penalty ranging between Rs 20 and Rs 50.