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Finance Ministry Says No Hike in Service Charges as Bank of Baroda Rolls Back Decision

File photo of a Bank of Baroda branch.

File photo of a Bank of Baroda branch.

With regard to Basic Savings Bank Deposit accounts, it said, no service charge is applicable on the 60.04 crore such accounts, including 41.13 crore Jan Dhan accounts.

The Finance Ministry on Tuesday said that there has been no increase in service charges by any public sector bank even as Bank of Baroda decided to withdraw changes made with regard to the number of free cash deposit transactions in a bank account per month.

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, a Finance Ministry statement said. The number of free cash deposits and withdrawals, have been reduced from five each per month to three each per month, with no change in the charges for transactions in excess of these free transactions, it said.

"Bank of Baroda has since informed that in the light of the current COVID related situation, they have decided to withdraw the changes. Further, no other PSB has increased such charges recently," it said. Although, as per RBI guidelines, all banks, including public sector banks (PSBs), are permitted to levy charges for their services in a fair, transparent and non-discriminatory manner, based upon 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 pandemic, it said.

With regard to Basic Savings Bank Deposit (BSBD) accounts, it said, no service charge is applicable on the 60.04 crore such accounts, including 41.13 crore Jan Dhan accounts opened by the poor and unbanked segments of society, for the free services prescribed by RBI.

"In view of the current prevailing COVID-19 pandemic and its impact on the economy, it has been decided to withdraw the above circular with immediate effect," Bank of Baroda said in a statement.

Opposition political parties had also protested against the move.

Two sources said it was likely that the charges were rolled-back after government intervention.


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