Change of Rules in Banking Sector

The Reserve bank of India has made a few changes in the banking sector. These include the removal of the minimum balance penalty charges by the banks. Also, the need to seed & link bank accounts with AADHAR has been discussed.

What has happened?

• The commercial banks will now not be able to charge any minimum balance requirements for the Basic Savings Bank Deposit Accounts (BSBD).
• The BSBD accounts should be considered as normal banking facilities and it is counterintuitive that charges are levied on them as these basic banking facilities should be available free of charge.
• However, the banks will be able to fix service charges for any additional services they provide. However, the onus is on the banks to justify the reasonableness in fixing such charges.
• The banks must also clearly ensure that the customers have been made aware of the charges upfront and all new changes must be notified in advance.
• The banks are also to obtain the AADHAR numbers from individuals who are to receive any benefit or subsidy. This is done so that the Central/State governments are able to establish the identity of the individual.

The changes related to the AADHAR have been notified under section 7 of the Aadhaar (Targeted Delivery of Financial and Other subsidies, Benefits and Services) Act, 2016 (18 of 2016).