Page 47 - Banking Finance September 2023

FEATURES

Banks collected over Rs. 21,000

cr for breaching minimum

balance norm

ublic Sector Banks and 5 major private sector such accounts of Rs. 100-125 per transaction over and above
P banks collected over Rs. 35,000 crore in charges the non–maintenance of AMB charges.

since 2018 on account of non-maintenance of
Source of power
minimum balance, additional ATM transactions
According to Karad, a RBI circular permits banks to fix penal
and SMS Services, Finance Ministry informed the Rajya
charges regarding non-maintenance of minimum balance in
Sabha.
savings account, as per their Board approved policy, while
Data submitted as part of a written response by Minister of ensuring that all such charges are reasonable and not out
State in the Finance Ministry, Dr Bhagwat Karad, showed of line with the average cost of providing the services.
that public sector banks and five major private sector Further, RBI advised banks “to ensure reasonableness and
banks (Axis Bank, HDFC Bank, IndusInd Bank, ICICI Bank and equity in the charges levied by banks for sending SMS alerts
IDBI Bank) collected over Rs. 21,000 crore on account to customers and to leverage the technology available with
of non-maintenance of minimum balance, while over Rs. them and the telecom service providers to ensure that such
8,000 crore was collected for transactions through ATM charges are levied on all customers on actual usage basis,”
beyond free numbers and SMS charges gave over Rs. 6,000 he said.
crore. Talking about charges for additional ATM transaction, Karad
said that bank customers are eligible for five free
Banks’ charges
transactions (inclusive of financial and non-financial
Banks levy charges for non-maintainance of minimum
transactions) every month from their own bank ATMs. They
balance in an account, use of ATMs beyond free transactions,
are also eligible for fixed number of free transactions
depositing cash beyond a limit, among others. Of these,
(inclusive of financial and non-financial transactions) from
maintaining minimum balance (better known as monthly
other bank ATMs viz. three transactions in metro centres
average balance - MAB or average monthly balance - AMB)
and five transactions in non-metro centres. Beyond the free
is the amount a customer is required to maintain in his/her transactions, charges are levied for each ATM transactions
account every month. This varies from metro to small cities and the ceiling/cap on customer charges is Rs. 21 per
and to rural areas. The figure is calculated at the end of transaction, with effect from January 01, 2022.
each month and failure to maintain this balance results in
However, there is no requirement for maintaining minimum
penalties.
balance in the accounts opened under Pradhan Mantri Jan
For various banks, AMB ranges between Rs. 3,000 to Rs. Dhan Yojna and for Basic Savings Bank Deposit Account. At
10,000 in metros, Rs. 2,000-Rs. 5,000 in urban areas and the same time, for these accounts, there is no no limit on
Rs. 500-Rs. 1,000 in rural areas. Non-maintenance could number and value of deposits that can be made in a month.
lead to levy of charges ranging between Rs. 400-Rs. 500. However, withdrawal, including ATM ones, are limited to
Some private banks also levy cash transaction charges for four in a month. (Source: BL)

BANKING FINANCE | SEPTEMBER | 2023 | 47