Bank service charges you must know about
New Delhi: From this year, bank customers will not be required to pay any charges for bank transfers through NEFT (National Electronic Funds Transfer) or RTGS (Real-time Gross Settlement). The Reserve Bank of India (RBI) announced just after its July monetary policy review that processing charges levied on NEFT and RTGS transactions will not be applicable from January 2020.
However, NEFT, RTGS charges were not the only banking charges that customers had to pay. Banks levy charges on various other services and sometimes customers are not even aware of the charges.
Here’s a is list of bank service charges:
1. Cash handling: These charges are levied by many banks on cash deposits beyond a certain limit of transactions. In most cases, the first few transactions are free for customers. Typically, the rules are more relaxed if you carry out the transactions at your home branch. Cash handling charges form a significant part of charges levied by a bank. You are required to pay charges of around Rs 50-150 per transaction if you exceed the free transaction limit.
2. Fund transfer While NEFT and RTGS are free of cost now, IMPS (Immediate Payment Service) transactions are still chargeable. The charge depends largely on the amount being transferred and the policy of the bank. IMPS charge is usually in the range of Rs 1 to Rs 25.
3. Minimum balance: Almost all banks require their customers to maintain a monthly or quarterly average balance in their savings account. For instance, State Bank of India (SBI) customers holding savings accounts in metros and urban centre branches are required to maintain an average monthly balance of Rs 3,000. For customers with savings account in semi-urban, rural areas, the requirement drops to Rs 2,000 and Rs 1,000 respectively. The bank levies a charge of Rs 5-15 for non-maintenance of the required account balance. Some banks can charge as much as Rs 200-500.
3. ATM, debit card: According to the RBI mandate, banks are allowed to charge customers for more than five transactions made at ATMs in a month. The charges can vary from Rs 8-20 depending on the type of transaction. For instance, SBI allows its regular savings bank account holders eight free transactions, including five at SBI ATMs and three at other banks’ ATMs.
In non-metros, such account holders get 10 free transactions, including five at SBI ATMs and five at other banks’ ATMs. The regulator has also stated that banks can’t charge customers for failed transactions. If you misplace your card, banks charge you a fee of Rs 50-500 to replace it. Several banks allow only three to five free transactions even at their own ATMs. There are additional charges such as annual debit card charges to the tune of Rs 100-1,500 depending on the card and account type.
4. Cheque: RBI does not allow banks to charge more than Rs 150 per cheque for speed clearing of cheques worth over Rs 1 lakh; there are no charges for values up to Rs 1 lakh. You also have to pay a fee of Rs 100-150 if your cheque bounces, whether you are the issuer or the depositor. If you give a “stop payment” instruction on a cheque you have already issued, you will again have to pay a fee.
5. Documentation: Banks can also charge you for issuing documents. Generally, banks charge Rs 50-150 for issuing duplicate physical passbooks and account statements. If you do need a printed statement, take a printout yourself and get it attested by the bank. However, some banks charge for attestation too. For instance, SBI charges Rs 150 for signature verification.