Banking Charges: Relief for Common People, Banks’ Earnings May Be Hit

Reserve Bank of India on Bank Charges: The Reserve Bank of India (RBI) is now ready to curb the arbitrary practices of banks in the country. The central bank has directed banks to reduce charges on certain customer services, which could benefit account holders; Maharashtra Times reported.

Whether it’s debit card charges, penalties for not maintaining minimum balance, or loan processing fees—have you ever thought about how many types of charges are deducted from your bank account each month or year? Through such service charges, banks earn billions every year. But now, there is big news for customers.

RBI’s New Orders for Banks
The RBI has recently instructed banks to lower service charges on customer-centric products. According to Bloomberg, the central bank has asked banks to reduce charges such as debit card fees, penalties for not maintaining minimum balance, and late payment charges. Reports suggest that this move could affect banks’ revenues worth billions of dollars that come from such charges. Sources familiar with the matter revealed that RBI, in recent weeks, has directed banks to cut down fees related to debit cards, minimum balance violations, and late payments.

Decision Left to Banks
However, the RBI has not set a specific timeline, meaning it is up to banks to decide how much to reduce and on which services. Over the last few years, Indian banks have focused heavily on retail lending—including personal loans, car loans, and loans to small businesses—which has become a major source of income. But the growing burden of service charges on customers has also caught the central bank’s attention.

These charges particularly hit poor and low-income customers the hardest. Hence, the RBI is aiming to bring transparency in policies and balance in fee structures, ensuring that common people are not overburdened with extra costs.