Charges for not maintaining minimum balance in account will be reduced; RBI with decisive move regarding retail transactions

MUMBAI: The Reserve Bank of India (RBI) has asked banks to reduce service charges on retail transactions. The move aims to reduce charges, such as fees for using debit cards, late repayment penalties and charges for not maintaining a minimum balance, that directly affect the common man.

Different banks have different rates at present. The processing fee for small loans ranges from 0.50% to 2.5%. Some banks have set a limit of Rs 25,000 for processing fee for home loans. However, the RBI has not set a new limit for these rates.

The RBI's directive comes at a time when banks are focusing on small loans due to losses from large corporate loans. Banks have recently been making profits in personal, auto and small business loans.

Data shows that complaints about banking services have increased by 25 percent in the last two years. The RBI Governor had earlier asked banks to resolve complaints quickly and improve services in view of the increase in customer complaints.