Since 2018, both public sector banks and five major private sector banks (Axis Bank, HDFC Bank, IndusInd Bank, ICICI Bank, and IDBI Bank) have collected more than ₹35,000 crore in fees. These fees were charged to customers for a few reasons.
First, when customers didn’t keep the minimum required amount of money in their bank accounts, they were charged. Second, if customers used the ATM more times than what the bank allowed for free, they were charged. Third, fees were collected for sending SMS alerts to customers.
In simpler terms, if you have a bank account, you need to make sure you keep a certain amount of money in it. If you don’t, the bank can charge you some money. Also, if you use the ATM too many times, the bank can ask you to pay. Even receiving SMS alerts from the bank might cost you some money.
Different banks have different rules about how much money you need to keep in your account. If you don’t follow these rules, the bank can take some money from your account as a penalty. This is because banks need to cover their costs for providing services.
The government organization called the Reserve Bank of India (RBI) lets banks decide how much to charge for these things, but they should be fair and not too expensive. The RBI also told banks that they should charge customers for sending SMS alerts based on how much they actually use the service.
Talking about using ATMs, if you use your bank’s ATM, you usually get a few times to use it for free each month. But if you use it more times, the bank can ask you to pay a fee for each extra time. There’s a limit on how much they can charge for this, which is ₹21 per transaction since January 01, 2022.
Interestingly, some special bank accounts like those under the Pradhan Mantri Jan Dhan Yojna and Basic Savings Bank Deposit Account don’t need a minimum balance. However, there are limits on how many times you can take money out of these accounts, including from ATMs.
Note: A RBI circular permits banks to fix penal charges regarding non-maintenance of minimum balance in savings account, as per their Board approved policy, while ensuring that all such penal charges are reasonable.
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