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Stop banks from charging fees if there is no explicit approval from the customer

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Mr. Urjit Patel, Governor, Reserve Bank of India,

Dear Sir,

For last several years, banks are fleecing their customers for thousands of crores of Rupees by following a sharp and unethical practice, generally described as "Opt Out".

Here is how it works. Banks typically offer a free or discounted service to their customers for a limited period. At the end of the limited offer period, a fee is charged if the customer avails of the service.

There is nothing wrong with this. If a customer wants a service, he/she should be willing to pay for it. The problem lies in the underhand and unethical manner in which banks go about communicating the full facts to their customers.

Typically, the information about the fees chargeable at the end of the limited period offer is buried in small print towards the end of the communication. The critical element in this information is that the onus is on the customers to "Opt Out" of the service. If they don't the banks assume their consent and continue to charge the fee.

The fact is that in an effort to sell more and more products and services banks flood their customers with communications. It is very very difficult for most customers to go through all the communications and figure out the parts where a fee is charged for some service unless and until the customer "Opts Out" of the service. Inevitably, most customers, I would venture to guess upwards of 90%, being unaware of the additional fees don't "Opt Out" and get charged. Current RBI Guidelines allow this practice and though sharp and unethical, its considered legal.

The fact is that this principle of "Charged unless you Opt Out" is akin to pickpocket dipping into a wallet, unless explicitly stopped.

We believe that the RBI should stop this practice. Instead it should mandate that the banks cannot charge fees for a product or service, unless and until a customer "Opts In" i.e specifically requests that the service be continued and is willing to pay the fees for it.

In legal terms, there is a principle of "Informed Consent". Current practice that buries information about fees and forces the customer to "Opt Out" violates this in spirit if not in letter. By mandating that the banks charge fees if and only if a customer has chosen to avail of the services, ("Opted In" so to say), the RBI can prevent the violation of this principle of "Informed Consent."

To illustrate the merit behind this petition, please look at this embedded link of a news report on such practices currently prevailing in the banking sector.

Please stop this sharp and unethical practice.


Raju Kane, one behalf of al the banking customers in India


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