AAP Rajya Sabha MP Raghav Chadha ignited a crucial debate in Parliament, exposing hidden bank charges and fees that millions of customers unknowingly pay. His revelations spotlight how banks deduct hundreds—even thousands—of rupees annually through obscure fees, sparking calls for urgent reforms.
Also Read: ATM Withdrawals to Get Costlier from May 1 as RBI Approves Fee Hike
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Key Charges Highlighted by Raghav Chadha
Chadha listed eight common hidden bank charges and fees draining accounts nationwide:
- Minimum Balance Fees: Banks deduct ₹100–₹600 monthly if your balance falls below a threshold. “Banks earned ₹3,500 crore from this fee alone in 2022–23,” Chadha revealed.
- Extra ATM Costs: Beyond 2–3 free transactions monthly, ₹20 is charged per withdrawal.
- Inactivity Penalties: ₹100–200 annually for inactive accounts.
- Bank Statement Fees: ₹50–100 for physical copies.
- SMS Alert Charges: ₹20–25 per quarter for transaction updates.
- Loan Processing & Prepayment Fees: 1–3% of loan amounts as processing charges + penalties for early closure.
- Signature/Nominee Changes: ₹200 per update.
- NEFT/Demand Draft Costs: Fees up to ₹200 per transaction.
The ₹3,500 Crore Question: Who’s Profiting?
Chadha emphasized that hidden bank charges and fees disproportionately affect low-income households. “Banks profit from confusion,” he stated, citing how vague fee structures and poor communication leave customers unaware.
Did You Know?
- Over 60% of Indian bank customers don’t review monthly statements.
- Only 22% know inactivity can trigger penalties.
Erosion of Trust in Banking Systems
Beyond fees, Chadha warned of declining public trust due to:
- Rising fraud cases.
- High loan interest rates.
- Inadequate deposit security.
“When banks prioritize profits over people, it’s time for accountability,” he asserted, urging Finance Minister Nirmala Sitharaman to intervene.
How to Avoid Hidden Bank Charges and Fees
- Maintain Minimum Balance: Set reminders to avoid penalties.
- Opt for Digital Statements: Skip physical copies to save ₹600 yearly.
- Monitor ATM Usage: Stick to free limits or use UPI.
- Update Accounts Regularly: Prevent inactivity fees with small transactions.
- Negotiate Fees: Ask your bank to waive non-essential charges.
Chadha’s revelations have triggered social media outrage, with #StopBankFees trending. Customers demand transparent pricing and stricter regulations.
Awareness is your best defense against hidden bank charges and fees. Review statements, question unexplained deductions, and share this article to protect others.
What Are the Most Common Hidden Bank Charges and Fees in India?
Banks impose multiple hidden charges, including:
– ₹100–600/month for minimum balance non-maintenance.
– ₹20 per extra ATM transaction beyond 2–3 free withdrawals.
– ₹100–200/year for inactive accounts.
– Up to ₹200 for NEFT/demand drafts and ₹100 for physical bank statements.
How Much Can Banks Deduct for Not Maintaining a Minimum Balance?
Banks deduct ₹100–600 monthly if your account balance falls below the required limit. In 2022–23, banks earned ₹3,500 crore from this fee alone, as highlighted by AAP MP Raghav Chadha.
Are ATM Transactions Free in 2025?
No! Banks allow only 2–3 free ATM withdrawals monthly. Post that, each transaction costs ₹20. Opt for UPI or digital payments to avoid extra charges.
What Is an Inactivity Fee, and How Much Do Banks Charge?
If your account has no transactions for 12+ months, banks levy an inactivity fee of ₹100–200/year. Regular small transactions can help you avoid this penalty.
Is the Government Addressing Hidden Bank Charges and Fees?
AAP MP Raghav Chadha raised the issue in Parliament, urging Finance Minister Nirmala Sitharaman to regulate these fees. Public pressure and social media trends like #StopBankFees are pushing for stricter reforms.