In Public Interest: How GST on bank penalties is affecting depositors | Interview

For crores of bank customers in India, failing to maintain the minimum balance in their savings account comes with a hidden penalty, not only do banks deduct charges, but they also impose GST on those charges. What makes the issue worse is the lack of regulation. The Reserve Bank of India (RBI) has not set clear rules on these penalties, leaving it to individual banks to decide how much to charge In this week’s In Public Interest, TNM’s Shabbir Ahmed speaks to Chandramouli Mohan, a retired banker with nearly four decades of experience in public sector banks, to understand how penalty charges and GST deductions operate in practice, how RBI's silence has allowed banks to profit unchecked, and what reforms are urgently needed to safeguard the depositors.