The Federal Reserve has imposed new rules that will forbid banks from charging many overdraft fees unless customers opt for the service.

The new rules cover overdrafts from ATM withdrawals as well as debit card purchases.

The Federal Reserve took the recent step after widespread complaints that banks charge exorbitant fees from customers for becoming overdrawn.

Under the new rules, banks will have to notify their customers about their overdraft protection and fees before asking them if they want to sign up.

According to estimates, banks charge up to $30 from a customer if he overdraws his account by just $10. Banks make $25-$38 billion a year from overdraft fees.

Speaking on the issue, chairman of the Federal Reserve Ben Bernanke said, “The final overdraft rules represent an important step forward in consumer protection.”