Have Public Sector Banks increased service charges on Savings, Current, Jan Dhan accounts? FinMin shares fact

Bank Service Charges: In the wake of reports claiming a steep increase in service charges by certain Public Sector Banks (PSBs), the Ministry of Finance today released the factual position on the service charges levied by banks on different types of accounts. Here are all the details you should know

Service charge on Basic Savings Bank Deposit (BSBD) accounts including Jan Dhan accounts 

The ministry said that no service charge is applicable on the 60.04 crore BSBD accounts, including 41.13 crore Jan Dhan accounts opened by the poor and unbanked segments of society, for the free services prescribed by RBI.

Service charges on Regular Savings accounts, Current Accounts, Cash credit accounts and Overdraft accounts

The ministry said that charges have not been increased. However, Bank of Baroda has made certain changes w.e.f. November 1, 2020. The changes made by the Bank of Baroda are with regard to the number of free cash deposits and withdrawals per month. 

What was the change made by the Bank of Baroda? 

Bank of Baroda had reduced the number of free cash deposits and withdrawals from 5 each per month to 3 each per month. There is, however, no change in the charges for transactions in excess of these free transactions.

Bank of Baroda withdraws changes

Bank of Baroda has also informed that in the light of the current COVID-19 related situation in the country, they have decided to withdraw the changes. 

No other Public Sector Bank has increased such charges recently.

The ministry cited the RBI guidelines which allow all banks, including Public Sector Banks, to levy charges for their services in a fair, transparent and non-discriminatory manner on the basis of the costs involved. 

However, the Finance Ministry said that all Public Sector Banks have said that they do not propose to raise bank charges in the near future in view of the COVID-19 pandemic.

“Although, as per RBI guidelines, all banks, including PSBs, are permitted to levy charges for their services in a fair, transparent and non-discriminatory manner, based upon costs involved, other PSBs have also intimated that they do not propose to raise bank charges in the near future in view of the COVID pandemic,” the Finance Ministry said.