Outlook Business Desk
Public sector banks collected over ₹2,300 crore in service charges for providing online services over the last five years, the Ministry of Finance informed the Lok Sabha on Monday. These charges are permitted as 'reasonable fees' for banking services, as reported by The Economic Times.
During the Lok Sabha session on July 28, 2025, Members of Parliament (MPs) Dr T Sumathy (Thamizhachi Thangapandian) and Thiru D M Kathir Anand had asked questions about revenue earned by banks through online service charges and the Reserve Bank of India’s (RBI) role in managing foreign exchange reserves.
In the ongoing Monsoon session of the Parliament, MPs in the Lok Sabha asked whether public sector and scheduled banks are charging customers for various services offered both online and through branch networks. In response, the government said the RBI’s Master Circular on ‘Customer Service in Banks’ allows banks to levy the charges.
The government clarified that each bank’s Board can decide the charges, provided they are reasonable and reflect service costs. Banks are also required to display these charges clearly on their websites and branch notice boards for transparency.
MPs asked whether public sector and scheduled banks have earned rising revenues from service charges collected via both online platforms and physical branches over the last five years—and if so, the full details.
The government replied that public sector banks, over the past five financial years, earned over ₹2,300 crore from online services including merchant payments via debit cards, internet and mobile banking, government business, foreign exchange, fee payments, and fund transfers through IMPS, NEFT, and RTGS methods.
The non-interest income earned by public sector banks through all services, both digital and in-branch, increased at a Compound Annual Growth Rate (CAGR) of 9.15% during the last five years—between FY 2019–20 and FY 2024–25.
During the session, another question was raised on whether the Indian government had used its foreign exchange and gold reserves to stabilise the Indian Rupee against the US dollar.
The government replied that as per the (RBI), the Indian Rupee’s value is determined by market forces. RBI doesn’t aim for any fixed rate but intervenes during excessive volatility. Interventions from September 2024 to April 2025 were shared in both US dollar and Indian Rupee terms.