Skip to main content

Loot of people’s money by banks? RBI "fails" to issue guidelines on charges

Counterview Desk
The Financial Accountability Network (FAN), a collective of civil society organisations, unions, people's movements and concerned citizens to raise the issues of accountability and transparency of the national financial institutions, has said that India's banks should "stop imposing bank charges on poor for flourishing the rich in India".
Pointing out that during April 2014-September 2018, the money earned as penalty by the 21 public sector and three private sector banks amounts to Rs 12,388.56 crore, a FAN note insists, "It is unfortunate that despite mounting evidence that bank charges are burdening the people, Reserve Bank of India (RBI) has not yet issued any guideline on the service charges that are currently being levied by the banks for the savings account holders."

Text of the FAN note:

The recently released Reserve Bank of India’s (RBI) annual Banking Ombudsman Report for the year 2017-18 mentions a pilot study in Mumbai on the service charges levied by the banks for basic banking services. The study was commissioned to ascertain customer feedback and the need for rationalisation of charges.
The study reveals that over 30 per cent of the customers were unaware of the service charges and 25 per cent expressed their discontent on penalties such as the one levied for not maintaining the minimum balance. The report further states that last year, “Complaints on ‘Levy of Charges without prior notice’ constituted 5 per cent of the total complaints, but on a year-on-year basis it witnessed an increase of 13 per cent.”
It is unfortunate that despite mounting evidence that the bank charges are burdening the people, RBI has not yet issued any guideline on the service charges that are currently being levied by the banks for the savings account holders. As the primary regulator of commercial banks, the RBI cannot remain silent when the charges are over-burdening the people.
In FY 2017-18, 21 public sector banks collected Rs 3490.49 crores just for the non-maintenance of the minimum balance! During April 2014-September 2018, the money earned as penalty by the 21 public sector and three private sector banks (Axis, HDFC and ICICI) amounts to Rs 12,388.56 crore.
It is important to highlight that the penalty for not maintaining minimum balance is only one of the various charges imposed by the banks for the basic banking services.

These service charges include: 

  • Cash deposits and withdrawals at bank branches; 
  • cash deposits in accounts other than one’s own; 
  • cash withdrawal from ATMs; 
  • issuance fee on debit cards; annual charge on debit cards; 
  • balance inquiry at ATMs; mini-statements from ATMs; 
  • regeneration of ATM pin code from branch; account closing charges; 
  • transaction declined with debit cards due to insufficient funds; 
  • SMS alerts that a customer gets from banks; change in address; 
  • change in mobile number; changes in KYC related documents; 
  • cash deposits at CDMs (Cash Deposit Machines); 
  • change of soiled/mutilated/old currency notes; NEFT and RTGS transfer of funds; 
  • surcharges on uses of debit cards for rail tickets, petrol/fuel/ gas stations and payment of certain bills and government services; 
  • cheque books; 
  • demand draft; 
  • balance certificate; 
  • and signature verification. 
The cumulative amount from the services mentioned above from all the banks will be much higher. In response to the Right to Information query, the Bank of Baroda recently revealed that from FY 2014-15 to FY 2017-18, it earned Rs 499.21 crore just on the ATM and SMS charges.
While, in the last few years, on the one hand, in the name of financial inclusion, the government is forcing previously unbanked people to be a part of the banking system. On the other, to show their balance sheet, in the wake of gigantic Non-performing Assets (NPAs) accumulated by the banks, in the favourable light, the banks are inventing new ways to maximise profit.
All this exist along with various types of premier bank accounts, in which one can get an exemption from the charges mentioned above if the person maintains a higher balance in the account.
The consequence of this unfair policy is that the people who receive government subsidies, pensions or any welfare scheme of the government are those who are also forced to pay higher fines and charges! It is not just shameful but brutal that the banks are trying to compensate their losses created due to the reckless lending to the filthy rich by draining the blood and sweat of the poor in the name of service charges.
Our ongoing campaign against bank charges has brought to fore the loot of people’s money by banks. Students, labourers, hawkers, farmers, shopkeepers, homemakers, unemployed youth, urban poor, and pensioners from across the country have shared their stories of losing money to the bank.
Many of the people whom we met during the campaign narrated how they lost their Mahatma Gandhi National Rural Employee Guarantee Act (MGNREGA) wages, scholarships, pensions, because of various bank charges.
Rehan Tirmizi, a student at the Jamia Millia Islamia, New Delhi, narrated to us how the penalty levied by the HDFC Bank due to the non-maintenance of the minimum balance has pushed his account balance to minus Rs 4,000. Shanti Devi, a daily wage labourer from Muzaffarpur, Bihar, told us how Rs 500 she earned from MGNREGA work was reduced to only Rs 60 due to this policy.

We demand:

  • Immediately remove all bank charges on the savings bank account
  • Stop fleecing the poor to compensate for the loss by the Rich
  • Make willful default a criminal offence
  • Implement stringent recovery mechanisms for NPAs of large corporate loans
  • Ensure proper due-diligence in lending to big businesses

Solidarity statements:

  • The Burden of the NPA created by the rich has fallen on the marginalised sections: Dr Syeda Hameed, former member, Planning Commission of India
  • It has come to light that the banks, in the name of providing various banking services, are illegally and unnecessarily charging the common citizens. This is loot as it comes at the cost of the customers who can't maintain a certain balance in the account: Medha Patkar, leader, National Alliance for Peoples’ Movement
  • The policy of bank charges must be reviewed immediately. If banks can have charges for the minimum balance, what prevents them from introducing one for the high-net-worth individuals, who have multiple and more complex relationships with the banks?: Thomas Franco, former general secretary, All India Bank Officers Association
  • National Hawkers Federation protests this policy of bank charges in strongest terms. The hawkers, street vendors, and other urban poor and are the worst affected: Shaktiman Ghosh, general secretary, National Hawkers Federation
  • The bank charges as unacceptable and that it must go: Vijoo Krishnan, Central Committee Member of CPI-M, and Joint Secretary of the All India Kisan Sabha
  • The poor and middle-class like small traders, labourers etc., who have been included in the banking system by force, have to pay the charges. This is unjust: Harsh Mander, Centre for Equity Studies and Aman Biradiri
  • This ongoing loot in the name of bank charges has to be stopped. The solution to the present crisis in the banking sector is to have stronger public sector banks working without any political interference to protect the interests of the people: Amitabh Behar, Chief Executive Officer, Oxfam India
  • Ambani and Adanis do not have a minimum balance in their bank accounts, poor; student; farmers; women etc. does! So people, who are already poor, are being fleeced. This is immoral and fraud. We demand that the bank charges be scrapped so that we can stop the poor becoming poorer: Shabnam Hashmi, Social Activist, Anhad
  • The rule on the maintenance of minimum balance is bizarre because everyone would like to have a high bank balance. Those who can't maintain minimum balance are the ones who do not have any money. Bank charges are a tax on poverty. We must make this system of hidden charges more transparent and all the unjust charges must be scrapped: Shehla Rashid, leader, Jammu and Kashmir Peoples' Movement
  • In the name of achchhe din, bure din has arrived in India. One can understand this by the fact that it is now a crime to be poor and it is fined: Umar Khalid, United Against Hate

Comments

TRENDING

Wave of disappearances sparks human rights fears for activists in Delhi

By Harsh Thakor*  A philosophy student from Zakir Hussain College, Delhi University, and an activist associated with Nazariya magazine, Rudra, has been reported missing since the morning of July 19, 2025. This disappearance adds to a growing concern among human rights advocates regarding the escalating number of detentions and disappearances of activists in Delhi.

How community leaders overcome obstacles to protect forests and pastures in remote villages

By Bharat Dogra  Dheera Ram Kapaya grew up in such poverty that, unable to attend school himself, he would carry another boy’s heavy school bag for five kilometers just to get a scoop of daliya (porridge). When he was finally able to attend school, he had to leave after class five to join other adolescent workers. However, as soon as opportunities arose, he involved himself in community efforts—promoting forest protection, adult literacy, and other constructive initiatives. His hidden talent for writing emerged during this time, and he became known for the songs and street play scripts he created to promote forest conservation, discourage child marriages, and support other social reforms.

‘Act of war on agriculture’: Aruna Rodrigues slams GM crop expansion and regulatory apathy

By Rosamma Thomas*  Expressing appreciation to the Union Agriculture Minister for inviting suggestions from farmers and concerned citizens on the sharp decline in cotton crop productivity, Aruna Rodrigues—lead petitioner in the Supreme Court case ongoing since 2005 that seeks a moratorium on genetically modified (GM) crops—wrote to Union Minister Shivraj Singh Chouhan on July 14, 2025, stating that conflicts of interest have infiltrated India’s regulatory system like a spreading cancer, including within the Indian Council for Agricultural Research (ICAR).

The GMO illusion: Three decades of hype, harm, and false hope

By Sridhar Radhakrishnan  Three decades of hype, billions of dollars spent, and still no miracle crop. It's time to abandon the GMO biotech fairy tale and return to the soil, the seed, and the farmer. “Trust us,” they said. “GMOs will feed the world.” Picture a world where there is plenty of food, no hunger, fields grow without chemical pesticides, children are saved from malnutrition, and people live healthily.

Sandra Gonzalez Sanabria: An inspiring life from Colombia’s Amazonian valley

By Vidya Bhushan Rawat*  In the village of Héctor Ramírez, known as Agua Bonita, in La Montañita, Caquetá, Colombia, a vision of peace and renewal is unfolding. In the pre-2016 period, this would have been nearly impossible for outsiders to visit, as it was the epicenter of violent resistance against state oppression. However, after the Peace Accord was signed between the Colombian government and former revolutionaries—marking the end of a 70-year insurgency that claimed over 400,000 lives until 2025, including civilians, rebel fighters, and security personnel—things began to change. Visiting Agua Bonita during the Global Land Forum in Bogotá revealed a village of hope and resilience. Former FARC revolutionaries have settled here and transformed the village into a center of peace and aspiration.

Overriding India's constitutional sovereignty? Citizens urge PM to reject WHO IHR amendments

By A Representative   A group of concerned Indian citizens, including medical professionals and activists, has sent an urgent appeal to Prime Minister Narendra Modi, urging him to reject proposed amendments to the International Health Regulations (IHR) before the ratification deadline of July 19, 2025. 

Indigenous Karen activist calls for global solidarity amid continued struggles in Burma

By A Representative   At the International Festival for People’s Rights and Struggles (IFPRS), Naw Paw Pree, an Indigenous Karen activist from the Karen Human Rights Group (KHRG), shared her experiences of oppression, resilience, and hope. Organized with the support of the International Indigenous Peoples Movement for Self-Determination and Liberation (IPMSDL), the event brought together Indigenous and marginalized communities from across the globe, offering a rare safe space for shared learning, solidarity, and expression.

Activists allege abduction and torture by Delhi Police Special Cell in missing person probe

By A Representative   A press statement released today by the Campaign Against State Repression (CASR) alleges that several student and social activists have been abducted, illegally detained, and subjected to torture by the Delhi Police Special Cell. The CASR claims these actions are linked to an investigation into the disappearance of Vallika Varshri, an editorial team member of 'Nazariya' magazine.

India’s zero-emission, eco-friendly energy strategies have a long way to go, despite impressive progress

By N.S. Venkataraman*   The recent report released by OPEC’s World Oil Outlook 2025 has predicted that by the year 2050, crude oil would replace coal as India’s key energy source. Clearly, OPEC expects that India’s dependence on fossil fuels for energy will continue to remain high in one form or another.