M Veerappa Moily, Chairman of Parliamentary Standing Committee on Finance, assures a discussion on ever-increasing bank charges
M Veerappa Moily, Chairman of the Standing Committee of Parliament on finance assured a group of activists that the issue of ever rising and unfair bank charges would be discussed in detail by the committee. The meeting, which included Mr Dinesh Trivedi (of the All India Trinamool Congress) and Mr TK Rangarajan (Communists Party of India-Marxist) was told how banks have begun to levy a series of unjustified and unconscionable charges on customers, which actually hurt poorer customers at a time when the government is working at financial inclusion, while rich customers with large deposits are not charged. They drew attention to the furore caused by State Bank of India (SBI) decision to charge Rs25 on every single cash withdrawal from SBI Buddy app through ATM.
 
The group, including well known NGOs, trade unions, finance editors and experts presented Mr Moily a 1,100 page print out of over 100,000 signatures to an online petition at Change.org protesting against discriminatory bank charges and demanding action.
 
The group also submitted a Memorandum with seven points and requested that these be addressed urgently. 
 
The meeting was coordinated by Mr Sanjay Nirupam, President, Mumbai Regional Congress Committee and former Member of Parliament. 
 
The Parliamentary Standing Committee on Finance was in Mumbai for meetings with banks, insurance companies and financial institutions on 12th and 13th May. 
 
The group told the Standing Committee that although the Reserve Bank of India requires bank charges to be reasonable, how it refuses to go into the reasonableness of charges and allows banks to operate as a cartel. Since consumers are a disaggregated lot, they are unable to fight back.
 
The group asked for the following key issues to be dealt with urgently. 
 
1. Ensure Digital Safety by converting RBI’s draft circular of August 2016 into a formal Master Circular, thereby limiting customer liability and shifting the onus of proving customer fault to banks. This is in line with international best practices.
 
2. Remove Average Minimum Balance Charges: If a customer’s balance is low, then the bank can downgrade the account to a Zero Balance or No-Frills Account (and reduce services like chequebook facilities etc.). It cannot levy a charge. This is in line with international practices.
 
3. Remove charge on cash transactions, or low value cheques, which discriminates against economically weaker bank customers and students. 
 
4. End Discrimination against old borrowers vis-à-vis New ones for Loans- where new customers are offered significantly lower interest even on floating rate loans.
 
5. Banks must be ordered to stop the discriminatory charge levied to reduce interest rate on floating rate loans. (There is no such charge or delay when interest rates increase).
 
6. Making NEFT (National Electronic Fund Transfer) transactions safe by capturing additional data such as name and branch details and have a robust redress process for inadvertent mistakes. 
 
7. Bank services must have a rational, transparent and non-discriminatory pricing framework for banks based on a detailed costing of all products and services
 
The group of activists who met the standing committee members: Sucheta Dalal, Trustee, Moneylife Foundation; AV Shenoy from the Rashtriya Matadata Manch; Ms Lalita Joshi and Mr Devidas Tuljapurkar, both Joint Secretaries of the All India Bank Employees Association (AIBEA); Harsh Vardhan Roongta, Financial Expert and Advisor; RN Bhaskar, Senior Editor and columnist; Dolphy D’souza, Convener, Police Reforms Watch; DS Ranga Rao, Public Concern for Governance Trust (PCGT); and Yogesh Sapkale, Director (Projects), Moneylife Foundation. Several leading unions and activists have signed and supported the Memorandum on bank charges. 
 
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    COMMENTS

    Sudharsan R

    4 years ago

    Pure heavy charges. Minimum balance charges even if we don't have money... Purely sucking public that too an average minimum balance of 500 and 1000 is reasonably OK but 3000 and 5000 is very high in public sector bank SBI

    Ravindra Bhat

    4 years ago

    Hope things fall in place... And arrogance of these banks falls flat. Great initiative from money life...

    Suketu Shah

    4 years ago

    PMO office(not MoF as of today) shd have moneylife advising them directly on suggestions on major changes required in financial/banking,etc sectors in India.Positive results wl be much faster to protect customers.

    Mahesh S Bhatt

    4 years ago

    Good Great Show Money Life. But I donot know how much the will materialise?
    Mahesh Bhatt

    Jagdish Chavan

    4 years ago

    Great and timely efforts by MLF.

    Simple Indian

    4 years ago

    A very good initiative taken by MLF. All the points mentioned for action / implementation are justified and will benefit millions of Bank customers who have been forced to put up with the whims n fancies of Banks all this while. Will be good if the concerned Govt Depts/RBI/Banks take note and implement the same at the earliest.

    SRINIVAS SHENOY

    4 years ago

    With such a promising start and adequate backing, hope our objective of having reasonable charges levied, for all financial transactions, as per international practices by banks is met. Hope a vigorous follow up action of recovery of bad loans follows in a great way.

    SRINIVAS SHENOY

    4 years ago

    With such a promising start and adequate backing, hope our objective of having reasonable charges levied, for all financial transactions, as per international practices by banks is met. Hope a vigorous follow up action of recovery of bad loans follows in a great way.

    SRINIVAS SHENOY

    4 years ago

    With such a promising start and adequate backing, hope our objective of having reasonable charges levied, for all financial transactions, as per international practices by banks is met. Hope a vigorous follow up action of recovery of bad loans follows in a great way.

    ksrao

    4 years ago

    At a time when the government is thinking of extensive use of digitisation for all financial transactions, banks' increasing and imposing charges is just anti-national.

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