New Delhi: The Reserve Bank of India keeps making big decisions every day, which affect everyone. Now, the RBI intends to reduce service charges levied by banks. These include debit card fees, minimum balance penalties, and late fees. This move is expected to provide relief to customers from the high fees levied by banks.
The RBI issued a surprising message to banks a few days ago. However, no official statement has been released by the RBI on this matter. According to a report, people familiar with the matter, speaking on condition of anonymity, informed RBI officials in recent weeks that they intend to reduce service charges, including those related to debit cards, minimum balance violations, and late fees.
Learn about the reason for the penalty relief.
Did you know that this move comes after a renewed increase in retail loans by Indian banks in recent years? In the past few years, banks have focused more on retail loans after facing difficulties with corporate loans. These include personal loans, car loans, and business loans, which have boosted bank earnings again.
The pace of this growth has also attracted the attention of the Reserve Bank of India.
Some experts believe that the Reserve Bank is specifically monitoring these charges, which place a greater burden on low-income account holders. Furthermore, it has not set any fixed limit or rate, leaving it to the discretion of banks.
No mandatory limit
Currently, there is no fixed limit on the fees charged by banks. According to data from online financial marketplaces, processing fees for retail and commercial loans generally range from 0.5% to 2.5%.
Furthermore, some banks have also set a processing fee cap of ₹25,000 on home loans. According to a report, banks’ fee income increased by 12 per cent to ₹51,060 crore in the first quarter (April-June) of this financial year. The increase was only per percentage in the previous quarter.