RBI Cracks Down on Banking Charges: Standardized Format for All Banks on the Way

New Delhi: The Reserve Bank of India (RBI) has taken a strict stance on banking charges, pushing for greater transparency in fees and service charges across all banks. In collaboration with banks, the RBI is working to introduce a uniform system that discloses all charges in a standardized format, including detailed break-ups for loan processing fees.

According to reports, the move aims to eliminate hidden and overlapping charges, ensuring that banking services are straightforward and clear for customers. Following government intervention earlier this year, most public sector banks had already removed penalties for minimum balance requirements.

Clearer Rules for Customers
Sources say the RBI wants banking charges to be completely transparent and easy to understand. Currently, discussions are ongoing on whether all banks can adopt a single standard format to report service charges. This would cover account types, personal loans, and other banking services, making it easier for customers to compare charges across banks.

RBI has also asked banks to prepare a list of services that will have uniform charges across all branches. While banks are still reviewing the suggestions internally, officials indicated that account-type-specific flexibility may be allowed, but charges for personal loans and other products will be simplified and rationalized.

Focus on Customer Service
RBI Governor Sanjay Malhotra emphasized after the recent Monetary Policy Committee (MPC) meeting that the central bank is prioritizing customer service and taking steps to enhance transparency. Last August, the Ministry of Finance informed the Lok Sabha that most public sector banks had removed minimum balance fees for savings accounts, while some banks had rationalized charges as per board-approved policies. Finance Minister of State Pankaj Chaudhary noted that these changes could also encourage higher deposit mobilization.

The initiative is expected to streamline banking charges, reduce ambiguity, and empower customers with clearer information about fees across all banking products.