Normally banks do not charge from their customer for depositing money to their own account. However, some banks levy charges for cash payment against credit card bills. Charges are collected at the time of accepting cash. As per the Reserve Bank of India (RBI) guidelines banks need to inform about changes in rates or charges to their customer one month before implementation. RBI vide its circular dated September 7, 1999 had given freedom to banks to decide service charges for various services offered to customers. Banks were asked to fix service charges having regard to the cost of rendering the services. Banks were also advised to ensure that the charges are reasonable and not out of line with the average cost of providing these services. Banks should also take care to ensure that customers with low volume of activities are not penalized.

According to RBI, the currency chest holding banks have been allowed to levy service charge of Rs.2 per packet of 100 pieces in cash deposited with their currency chest by non-currency chest branches. Banks have also been advised to put in place a transparent policy in this regard with the approval of their respective boards. 

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question raised in Rajya Sabha today. Cash handling charges allowed when banks ensure cost based, reasonable fees with prior customer notice and board transparency. Banks may impose cash handling charges for certain deposits, provided charges are cost based, reasonable, and not punitive to low activity customers; customers must be informed one month before changes. Currency chest banks may levy a packet handling charge for deposits from non currency chest branches and must adopt a transparent, board approved policy governing such charges.