Banking services are going to be easier and cheaper with banking regulator Reserve Bank of India (RBI) recently asking banks to bring in uniformity and transparency in fixing service charges. The RBI move has come at a time when banks have been charging different fees for services like depositing cash and encashing cheque, discriminating between their customers at home branch and non-home branches.
The RBI’s contention is that if a particular service is provided free at home branch (where the account holder opened his/ her bank account), the same should be available free at non-home branches also. The central bank said in a notification last week that there should be no discrimination as regards intersol charges between similar transactions done by customers at home branch and those done at non-home branches. In other words, if your bank is not charging you anything for depositing Rs 40,000 in your home branch in Delhi, he should be able to deposit the same amount free of charge in a Mumbai branch as well.
For cash deposit at a non-home branch, Punjab National Bank charges Rs 2 per Rs 1,000 with a minimum of Rs 25 per transaction. It charges Rs 1 per thousand beyond Rs 25,000 for cheque encashment. For cash withdrawal at non-home branches, PNB charges Rs 2 per thousand beyond Rs 50,000 per day. All these services come free at the customer’s home branch.
In the case of ICICI Bank, for cash deposits, first transaction in a month is free and then Rs 5 per thousand subject to a minimum of Rs 150. For withdrawals in a non-home branch, first transaction in a month is free and then Rs 5 per thousand subject to a minimum of Rs 150. For State Bank of India, there’s a charge of Rs 2 per thousand with a minimum of Rs 10 per transaction for cash deposits in non-home branch. Ditto is the case with other banks. While there are no charges in their home branch for cash and cheque deposits and withdrawals, they end up paying a fee in non-home branches.
The banking regulator acted on the recommendation of the Damodaran Committee on Customer Services, which observed a general discontent among all the strata of customers about charges levied by banks for getting services at non-home branches like pass-book updation, cash deposits etc. It agreed with the argument of the Damodaran panel