How banks are fleecing customers https://www.youtube.com/watch?v=vjOzAXjENRk Thomas Franco in The News Minute on
May 14, 2025 The Reserve Bank of India (RBI) has issued new guidelines on ATM operations across the country, covering aspects like security measures, transaction limits, and applicable fees. These norms determine the number of free transactions a customer can make at their own bank’s ATMs and those of other banks. Beyond these limits, customers are charged a transaction fee. The RBI also regulates ATM maintenance, cash loading, and security protocols. Thomas Franco, former General Secretary of the All India Bank Officers Confederation (AIBOC), raises concerns over how banks are increasingly turning into fund providers for corporates while neglecting the needs of the middle class. , Franco stresses the importance of banks playing an active role in building the inclusive development of the country.
The ATMs when it was introduced ,we told the customers that it is a free service. you can take money anytime 24 hours. don't come to the bank . you collect money from there. it's easy and no extra charges. But subsequently this ATM transaction charges have been introduced .
if you are transacting in your own bank's ATM in a month you can have maximum five transactions and if you are transacting in a other bank ATM if it is in the cities it is three transactions and if it is in the outside city areas up to five transaction . two clarifications are needed . You cannot have five free transactions on one card, totally. There are two type of transactions - financial and non-financial. Most people are not aware of the difference.
finance transaction is for taking out cash, non financial transaction is enquiring your balance . So even if you check your balance that will be considered as a transaction. the ATM itself is asking you a question do you want to see your balance , if you just click yes that is counted as another transaction
so if you are doing three withdrawals and every time you check your balance it becomes six transactions. so automatically from the sixth transaction onwards you have to pay 23 rupees plus GST of 18% . now some people might think that the increase is just from 21 to 23 rupees. But what will be the impact is that once you are keeping on increasing the faith in the system goes. People especially in rural, semi-urban areas who were taking money
only for small amounts because they don't want to carry much cash , now because of this restriction they will have to take more cash and keep at
home which is again a security risk. Secondly, because this restriction is coming they will now decide that okay let me go to the bank and transact my
business. all the banks especially the public sector banks are understaffed and one reason for understaffing was that " now you have so many digital facilities including ATM. why have so many staff at the counter.
so now we are living in digital India you don't need staffs Thats what has been propagated for so long and staff strength has been
reduced . so then the pressure mounts on the staff that people have to go there now
If it is a little more amount they are keeping say 5,000 10,000 rupees they would like to have a checkbook so that every time you don't have to go and
stand with write down the withdrawal and take money yourself alone. With cheque book you can send through a bearer . he can go and transact . So if you are taking a checkbook of say 10 leaves, you have to pay 40 rupees. If it is a checkbook of 25 leaves you have to pay 75 rupees.
So there again your expenditure is going up . Though this 21 to 23 rupees increase seems small , as per the 2023 report every day there are 6 billion transactions in the ATMs in India. there are 2 lakh 55,000 ATMs . The amount transacted is r 32 lakh crores
now you are putting that restrictions, naturally people have to rush to the branches for taking out the money that is one problem . secondly there is a projection that by 2027 , the number of transaction should go up by 8 billion transactions per day. so though the 2 rupee increase may appear small when you count as the number of transaction it's a huge amount which the banks are going to make.
as per the 2023 figures on ATM transaction charges alone 8,000 crores has been collected
Then you have something called minimum average balance so in the minimum average balance charges banks have collected 21,000 crores in 2023
alone. Though this was introduced only in 2019 in almost all banks. previous to that there was very small amount sometimes collected and for very small accounts people don't charge at all
In 2020 because of huge outrage from public that you are charging so much from a common man, state bank of India alone withdrew these charges in 2000 and they have not reintroduced. But all the other banks, public sector private sector this minimum balance charge is one major area.
you put some 1000 rupees they keepcollecting some money say 50 rupees every month one fine day . you go to the bank and find that you find your money has come down to 500 rupees . you tell the bank that okay I'm fed up you close account. They charge 500 rupees as closing charges.
so who is affected in all this is common man who are lower middle class upper middle class who are the actual owners of the bank i will say . If you see the balance sheet of banks -- banks are run on the deposit of the people . they don't have capital . they are taking your deposit giving us loan and they are making profit out of it. So a person who has just deposited some money in his savings bank account you give only 2% or 2.5% as
interest and he doesn't keep minimum balance , you again charge, if the number of transaction goes up you have some charge called transaction
charges, number of cheque leaves increase then you have again cheque leaf charges.
this is an injustice I feel. as per the one of the RBA reports 83% of the deposits are small household deposits and for those people if you keep charging so much they will once again switch over to other avenues . Maybe keep it in a box , maybe keep it with relatives. Why should they put their
money here and keep paying charges for that.
this will be an impact on the banking system as a whole . it may not take place overnight but over a period of time we have seen that the faith in the
system has started going down after demonetization. now you keep increasing these charges, here are so many other kind of charges safe custody charges , you keep your fixed deposit there or LIC policy there -- safe custody charge that it's all.
for safe custody safe deposit locker it's okay but then you have some transactions getting increased, again transaction charges you are giving
whether deposit or withdrawal number of transaction . Like they said that you go to bank business correspondent - don't come to the bank those fellows are sitting with the board - customer service point, no regular salary , some incentive they can
transact up to only 30,000 again there
if your transaction is going up for more
than three transaction you have to pay
extra 15,000 for 15 rupees per
transaction so in all possible ways
these people who are actually the owners
of the bank they are being
fleeced this is the contra this is not
the purpose for which nationalization of
the banks took place so RBA has to have
a reook so how how how are the uh rich
getting benefited out of these and why
why should you know people who trust in
the banking system who want to have
their savings get punished because
they're like putting their money in the
banks
see number
one those who are rich they transfer
money from bank to bank using a system
called RTGS or
NEFT in this the transaction charges are
so low but for small depositors you are
charging so
high and how the rich are getting
benefited this is
something not being talked about much
you go through the Reserve Bank of India
website there is a
uh report quarterly published called the
basic statistical returns
in that last year's report when I had a
look
449 corporate
borrowers who have taken loans above 100
crores they are being given loan at 4%
interest you take an education loan you
have to pay 11% 12% 13%
for home loan it's for home loan 7.5 7.8
in it because it is secured by the uh
house building so that is there but for
a
microenterprise small enterprise banks
charge 12%
13% whereas corporate having loan above
100 crores you see such a for that you
give at 4%
so all these charges and small interest
paid to the fixed deposits and savings
bank deposit that is to benefit few
corporates
449 less than
5% if I see less than
7% which is lesser than the housing loan
interest also there are some 9,000
people per benefit so whom are we
banking
banking for whom are we banking for yeah
to support only these corporates who are
a minuscule minority
they get all benefits and it is they who
do not repay you go to the NCT the loans
are written off so this is the tragedy
of this country in the last many years
which the reserve bank should really
look at no bank advertises that we are
giving loan at
4% but it came up in all the newspapers
that Tatas the forest in this country
they get 10,000 crores by for buying Air
India at 4% interest
rate this is a
contradiction what we need is the
farmers to get cheaper credit the MSMES
who are the major employers employment
generation is done there they should get
lesser but them we are charging high and
we are charging less for the corporates
who don't create much of employment also
so you talked about uh you know it may
sound as a very you know minor hike you
know 2 rupees or something like that or
even the interest charges but how does
it
affect a a common man like in this
entire system because of the system see
the common man as I said they are in the
savings bank deposit and current account
deposit is one of the major portion of
the money banks are almost 40 to 45% is
called the kasa deposits current account
and savings bank deposits savings
account
deposit current account banks does not
pay any interest at all okay that is for
rich we can say even For trusts they are
char asking to have only current
accounts but savings
bank they charge give you interest on
the minimum
balance
between the last 10 working days by the
time whatever saving you might have
withdrawn so even if you had kept money
for 29 days 30th you are withdrawing you
don't get any interest at all
so that way the people are getting
affected number
one
secondly the people who have to get
cheaper credit they are not getting
cheaper
credit that is affecting the whole
economy
see
the rich they get a big loan they may
not spend immediately but a MSM borrower
farm loan borrower he will immediately
spend that and it has an impact on the
economy there is a multiplier effect
which will not happen if they keep on
doing this and people will switch over
to other there are nidis available there
are cheat funds
available there are mutual funds
available so people will switch over
there so that will finally affect the
banking
system and that is the danger RVI should
foresee which They are not saying and
the
borrower especially the MSME and the
farmers where are they getting the
credit now they are going to the
non-banking financial
companies for which the reserve bank has
said that there is no need for any
interest ceiling earlier there was an
interest ceiling of 36%
last year they have removed that and
there are studies which are saying that
there are people paying 50% interest 60%
interest
so that's because they have gone to the
non-banking uh yeah because you are not
making small credit available you have
reduced the staff which has made it
impossible for banks to cater to small
borrowers they concentrate on the larger
borrowers and people are sent to the
non-banking financial companies earlier
non-banking financial companies could
not get credit from the banking system
now RBI is monitoring you give more fund
more fund to non-banking financial
earier we had a very simple principle
you cannot give loan for giving another
loan
but that is exactly what is happening so
there is a correation between all this
there is a vicious cycle so reserve bank
has to come out with alternatives
encourage small depositors with higher
interest rate small fixer deposits with
higher interest rate and this service
charges at least for the small
depositors it should be waved
you only told them to go digital and
when they go digital then you there are
some changes that have they have brought
in UPI also UPI transactions because
they said after
demonetization people prefer uh you know
um doing transactions via UPI cardless
cashless transactions and all that now
they have started charging for the UPA
transactions and so far this GPA and all
we are not paying any charges very soon
I am anticipating it to come because in
some other countries they have already
Google has char started charging it is
always like this now you attract saying
free free free come come and once you
get used to it you cannot avoid that and
then they start charging
So this transactions and all when you
give so much of concessions to the
corporates the new rich 10% of the
population in this country has all kind
of comforts for them you give every
concession but to the 90% you charge all
this this is something has to stop so
what has happened in the banking system
in the past 10 years because we have
seen dramatic changes that have taken
place is it because uh uh the policies
that are being brought by the union
government or it's the RBI that is
taking independent decisions what today
RBI is no more
independent it is dependent on the
government 2016 when large borrowers
were not repaying they serve bank came
with this declaration of 12 large
creditors
uh borrowers who have not repaid
published
that after that they issued a circular
saying that the bank should not lend to
a particular corporate above 10,000
crores all banks together in a
consortium till date it has not been
implemented who has to oversee it is the
RBA RBA has taken out the circular from
its
website so they are encouraging the
corporate credit
more they said by going to the national
company law tribunal under the insolveny
bankruptcy code you will get money
recovered very quickly but there what is
happening only in the name of haircut
write off right off right off anil Amani
has an outstanding of 46,000 crores the
company is taken over by MKkesh Amani
paying only 2% of the
amount just 450 crores instead of 45
46,000 cr so this is all happening
because of the government RVA
collaboration again the deposit rate I
was saying there was a time 18% interest
we were paying for the fixer deposits
senior
citiz 17% at time also banks were making
profit but now you have brought it down
to 6.5% 7% now it is further going down
so the some small depositors are getting
affected it is furly because of the
government's
policies collaborated by the Reserve
Bank of India again to the credits why
can't RBI say that for the education
loan borrowers especially small loans
four lakhs five lakhs two lakh give it
at a conventional rate of interest
earlier there was a condition which it
still operates but it is not implemented
1% of the total credit in the bank
should go to the weaker section of the
society at 4% simple rate of interest
that RVA is not
monitoring so most of the banks are not
doing
that so you are deviating from the
purpose of nationalization and the goals
of the constitution bringing down the
inequality that is not happening today
and one side you are forcing banks not
to increase the staff another side you
are saying give more mudra loan more PM
Swani loan i welcome we should give for
but those loans are not being given to
the right type of people so it's not
being repaid most of the loans are not
getting
repaid so banks depend on the credit
guarantee scheme and get some money
so the policies of the government in
simple term what I would say is that it
has to change instead of supporting a
minuscule
minority support the
majority reverse the policies
accordingly then only this company
country can prosper the constitutional
goals can be achieved right sir thank
you so much for uh joining us and uh
giving your views on uh an important
issue that people may not even realize
that it's affecting them