Commercial banks form a strong part of any economy. These banks are profit-seeking institutions that accept deposits from the public and advance money to individuals and corporations with the objective of earning a profit in the form of interest, commission, and others. In India, these commercial banks are regulated by the Reserve Bank of India, which is the central bank and supreme financial authority in India. Banks charge a fee for the services that they provide which is called the banking commission or a bank charge.
Banks charge their customers for a number of services to recover costs. These bank commissions can be charged on the number of times you swipe your credit/debit card, cheque book, maintaining a minimum balance. In your account, duplicate statements, dishonored cheques, cash transactions, failed ECS transaction, NEFT, RTGS, transaction at a non-home ATM, surcharge on shopping and petrol, international transactions, SMS services, and many others. this is a part of the banking commission that the bank charges to cover for the loss incurred due to many reasons.
The following are the banking commission/charges levied by banks for their services to customers:
- Normal service charges for maintenance of the accounts of the customers.
- Commission for issuing the bank draft or pay order or money transfers by banks.
- Service charges or penalty in respect of dishonor of cheques.
- Loan processing charges.
- Cost of cheque books or passbooks or statement of accounts.
- Issuing of certain certificates as required by the business firm in the normal course of business or for special purposes.
- Any other routine or special expenses in respect of bank transactions, as not mentioned above.
- Locker rent etc.
The amount charged as banking commission may differ depending on the blanket ruling by the RBI. Nominal charges are deducted from the bank account as banking commission to the functioning of the banks.