There was a time when going to the bank meant wasting your entire day. Long queues in bank branches, long wait for tokens and huge struggle to make entries in the passbook were common. Today the situation has completely changed. Your entire bank is now contained in a small smartphone in your hand. From the beginning of the country’s first bank ‘Bank of Hindustan’ in Calcutta in the year 1770 to today’s UPI revolution in the blink of an eye, India’s banking system has traveled a wonderful journey. From the State Bank of India (SBI) formed in 1955 to the nationalization in 1969 and then to today’s private banks, this foundation has now become completely high-tech. But, this digital facility also has a heavy price, which the common man of the country is paying from his own pocket.
Got relief from queues, but expenses increased
In the year 1987, when the country’s first ATM was installed in Mumbai, no one had thought that one day the bank branches would become so deserted. After the liberalization of 1991, the entry of private and small finance banks significantly increased the reach of services, but also intensified the competition to earn profits. Since 2016, UPI and various mobile payment apps have almost eliminated our dependence on cash. Now ‘tap-and-pay’ with debit card and paying by scanning QR code at shops is a part of common routine. In order to provide better and uninterrupted services to the customers, the government has also merged many public sector banks with each other, so that they can become more financially capable and stronger.
The trinity of Jan Dhan Yojana, Aadhar Card and Mobile (JAM) has directly connected even the remote rural areas of the country with the banking system. Even those who had never climbed the stairs of a bank, today have their own bank account and mobile wallet. After 2014, the government made many major reforms in the banking structure. The recovery of bad loans (NPA) of banks was done very strictly through schemes like Insolvency Act (IBC) and ‘Indradhanush’. The direct result of this is that by 2025, the gross NPA of the banks has come down to its lowest level and the banks are now working in huge profits.
‘Hidden charges’ are affecting your hard earned money.
The country’s banking system has definitely become stronger, but its entire cost is being recovered from the customers. For a common account holder, keeping money in the bank is no longer as cheap as before. If you do not have the prescribed amount in your savings account, many banks deduct a penalty. After this comes the number for ATM withdrawal. Money is deducted every time the limit of 5 free transactions (3 times in metros) is crossed in a month. From May 1, 2025, this ATM fee has been increased from ₹21 to ₹23 and tax on it has been increased. SMS alerts, which were once provided free for account security, are now being charged every month or quarter. Limits on depositing and withdrawing cash have also been imposed. Even for basic things like taking check book, updating passbook, getting duplicate statement and updating KYC, banks are now charging customers.
Preparation to make banks ‘national champions’
The coming times are going to be even more technologically advanced. After the new amendments in banking laws (2025), some big government schemes are now underway. The aim of these banks is no longer just social welfare, they are now working completely on corporate lines on the principle of ‘scale, speed and profit’. The use of Artificial Intelligence (AI) for cyber security and preventing fraud is increasing rapidly. In the coming times, technologies like AI chatbot and metaverse will completely change the face of banking. Experts believe that the burden on customers for these facilities may increase further.