The Reserve Bank of India has taken on to itself the task of ensuring that customers do not have to pay unduly high charges for availing of various banking services.
The RBI has set up a working group to ensure reasonableness of bank charges, after setting May 31, 2006 as the deadline for banks to inform public of the details of their various service charges.
The working group will formulate a scheme to ensure tenability of bank charges and it will be incorporated in the fair practices code.
The Banking Codes and Standards Board of India has been mandated to monitor compliance of the code. The group is expected to submit its report by the end of July 2006.
The RBI on Tuesday issued a directive to banks to disclose services charges in a format that covered almost 100 services that banks offer, including penalty for not maintaining minimum balance and charges for cheque books and debit cards.
N Sadasivan, banking ombudsman for Mumbai, has been named the head of the working group, which will also include four other members -- S Diwakara of All India Depositors' Association, H N Sinor, chief executive of Indian Banks' Association, and P Saran and Kaza Sudhakar, chief general managers of the RBI.
The group would study the basis and methodology used by banks to fix charges and fees for their services and would articulate the principles that could be considered fair.
The working group will evolve a scheme for ensuring the reasonableness of fixing/changing service charges and enumerate the various basic banking/financial services rendered to individual customers, the RBI said in a statement on Thursday.
The group will also suggest measures for monitoring compliance by banks with the fair practices code.