State Bank of Pakistan prohibits banks from recovering service charges on cash handling

Karachi: State Bank of Pakistan SBP on Wednesday prohibited all banks from recovery of any service charges on cash handling/ sorting at the time of acceptance of cash deposits at the counters from their depositors.

Further, banks will neither refuse such services nor recover service charges, on any other pretext, says SBP circular of October 19, 2011. However, SBP clarified that banks are allowed to recover service charges on deposit/ withdrawal of cash on-line as per their schedule of charges.

All banks are advised to ensure compliance of these instructions as non-compliance shall be dealt with in accordance with relevant provisions of law.

According to circular it has come to SBP’s notice that some banks are charging fee from their customers on account of cash handling/sorting at the time of receipt of cash deposits. As the acceptance of cash at counters from depositors is a core banking service, recovery of charges on such services is considered to be inappropriate for banks.

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