Bank of Baroda rolls back charges on cash deposits, withdrawals after public outcry

One of India's largest state-owned banks, Bank of Baroda has withdrawn the charges with regard to the number of free cash deposits and withdrawals per month following a public outcry.

The announcement came just a day after the bank said it would begin charging customers for basic transactions, including deposits and withdrawals, above certain limits.

In view of the Covid pandemic, public sector banks (PSBs) have decided not to raise bank service charges in the near future, a Finance Ministry statement said on Tuesday.

The decision is expected to be welcomed by general consumers of banking services who are already burdened due to the slowing of economic activities on account of the pandemic.

Bank of Baroda had made certain changes with effect from November 1, 2020, with regard to the number of free cash deposits and withdrawals per month.

The number of free cash deposits and withdrawals have been reduced from 5 each per month to 3 each per month, with no change in the charges for transactions in excess of these free transactions.

The Finance Ministry said in a statement that the Bank of Baroda has since informed that in the light of the current Covid-19 related situation, it has decided to withdraw the changes. 

Further, no other PSB has increased such charges recently.

The Finance Ministry said in a statement that the charges have not been increased with respect to regular savings accounts, current accounts, cash credit accounts and overdraft accounts.

Although, as per RBI guidelines, all banks, including PSBs, are permitted to levy charges for their services in a fair, transparent and non-discriminatory manner, based upon the costs involved.

Other PSBs have also intimated that they do not propose to raise bank charges in the near future in view of the Covid-19 pandemic, the statement said.

There have been several media reports alluding to steep increase in service charges by certain public sector banks (PSBs). In this context, the Finance Ministry said no service charge is applicable on the 60.04 crore BSBD accounts, including 41.13 crore Jan Dhan accounts opened by the poor and unbanked segments of the society for the free services prescribed by the RBI.

(With agency inputs)