Banks may soon have to cap the charges on basic services such as issuing a draft, remittances or for stop-payment instructions. Faced with a rising number of customer complaints on excessive charges, the Reserve Bank of India (RBI) has asked the Indian Banks' Association (IBA) to come up with guidelines on what the reasonable charges should be.

Apart from charges for issuing cheque books and drafts, the committee is looking at charges for cheque return, reviving inoperative accounts, issue of duplicate pass books and others such as not maintaining the prescribed minimum balance.

Charges for special services such as loans and credit cards are not within the committee's purview.

"There is wide disparity between what different banks charge their customers. The committee will come up with caps on what banks can charge for basic services," said a member of the sub-committee.

For instance, public sector lenders such as State Bank of India (SBI) require regular savings account customers to maintain a minimum average balance of Rs 1,000 per quarter, while private sector lenders such as ICICI Bank and HDFC Bank require a minimum balance of Rs 10,000.

Foreign lenders such as Citibank, Standard Chartered and HSBC have minimum balance requirements of Rs 25,000 per quarter.

The penalties for non-maintenance of minimum balance are also steep for private and foreign banks. SBI charges Rs 75 per year for non-maintenance of minimum balance. ICICI Bank and Citibank charge Rs 750 per quarter.

"A lot of these charges are deterrents and the banks don't really make money from them. They are used to increase efficiency and improve customer behaviour," said another sub-committee member. The committee is expected to submit its recommendations next month, and if RBI accepts them, the guidelines will come into effect from 1 April 2010.