RBI unveils fair practices code for banks

Mumbai, May 16 (UNI) The Reserve Bank of India (RBI) today made it mandatory for banks, including regional rural banks, to display and update on their websites the details of various service charges in a prescribed format.

The formats can be modified depending on products offered, but all service charges as indicated by the apex bank should be covered, the Reserve Bank today said.

All banks have been further asked to furnish by May 31, the details of service charges presently applicable to enable the apex bank to place them on its website. The banks have also been advised to display the charges in the local language.

The move follows the RBI receiving representations from the public about the unreasonable and non-transparent service charges being levied by banks ''indicating that the existing institutional mechanism in this regard is not adequate'', the apex bank stated in a release today.

The move is a part of the RBI's intention to ensure transparency in bank charges as enunciated by it in its annual policy statement last month.

The move is also expected to ensure that customers with low value or volume of transactions are not penalised.

Accordingly, now banks will have to provide information about the charges they propose to levy on services such as charges for non-maintenance of minimum balance in savings bank account or no-frills account, non-maintenance of minimum balance in savings account with or without cheque facility, issue of duplicate statement, issue of duplicate passbook, mode of calculation of minimum balance, details relating to issue and cancellation of demand drafts, collection of cheques and remittance facilities through other banks, amongst other things.

Banks will also have to display charges relating to loan processing, pre-payment charges, no-due certificate, charges for late payment of EMI, stop payment charges, etc, stated the RBI release.

As minimum information, banks will have to display information pertaining to services rendered free of charge, minimum balances to be maintained in savings bank account, charges leviable for non-maintenance of minimum balance in savings bank account, charges for collection of outstation cheques, charges for issue of demand draft, charges for issue of cheque books, account statement and account closure and charges for deposit/withdrawal at ATM locations, the apex bank stated.

UNI JJ MAZ SKB1928