RBI
\nhas issued a notification which makes the banks mandatory to inform the
\ncustomer immediately on the balance in the account breaching minimum balance
\nand the applicable penal charges for not maintaining the balance by way of SMS\/Email\/letter.
\nWhen the minimum balance is not maintained within one month from the date of notice of
\nshortfall, penal charges may be recovered from customer. This is really the
\ngood step by RBI. In most of cases the customer comes to know about the minimum
\nbalance when charges debited to his account. When bank inform the customer, then
\nhe has option of restoring the minimum balance and can avoid the charges. These
\nguidelines will applicable from 1^{st<\/sup> April 2014. <\/p>\n}

The text of notification is
\nas below:<\/p>\n

RBI\/2014-15\/308
\nDBR.Dir.BC.No.47\/13.03.00\/2014-15<\/p>\n

November
\n20, 2014<\/p>\n

All Scheduled Commercial
\nBanks,
\n(Excluding RRBs)<\/p>\n

Dear
\nSir\/Madam<\/p>\n

Levy of penal charges on non-maintenance of minimum balances in
\nsavings bank accounts<\/strong><\/p>\n

Please
\nrefer to our circular
\nDBOD.Dir.BC.53\/13.10.00\/2002-03 dated December 26, 2002 on
\n\u2018Minimum Balance in Savings Bank Accounts\u2019 advising banks to inform customers,
\nin a transparent manner, regarding the requirement of minimum balance in
\nsavings bank account and levy of penal charges for non-maintenance of the same
\nat the time of opening the account.<\/p>\n

2.
\nIn this connection, a reference is invited to paragraph 30 of Part B
\nof First Bi-monthly Monetary Policy Statement, 2014-15 announced on April 1,
\n2014, regarding \u2018Developmental and Regulatory Policies\u2019 proposing certain
\nmeasures towards consumer protection. One of the proposals contained therein
\nwas that banks should not take undue advantage of customer difficulty or
\ninattention. Instead of levying penal charges for non-maintenance of minimum
\nbalance in ordinary savings bank accounts, banks should limit services
\navailable on such accounts to those available to Basic Savings Bank Deposit
\nAccounts and restore the services when the balances improve to the minimum
\nrequired level. A reference is also invited to the recommendations of Damodaran
\nCommittee on customer service in banks which, inter-alia, recommended that \u2018banks
\nshould inform the customer immediately on the balance in the account breaching
\nminimum balance and the applicable penal charges for not maintaining the
\nbalance by SMS\/Email\/letter. Further, the penal charges levied should be in
\nproportion to the shortfall observed\u2019.<\/p>\n

3.
\nThe policy announcement has been reviewed after extensive consultation with
\nbanks. Consequent to these deliberations and after taking into consideration
\nthe recommendation of Damodaran Committee, it has been decided that while
\nlevying charges for non-maintenance of minimum balance in savings bank account,
\nbanks shall adhere to the additional guidelines given in Annex. The guidelines come into effect from April
\n1, 2015<\/strong>.<\/p>\n

4.
\nThese guidelines should be brought to the notice of all customers apart from
\nbeing disclosed on the bank\u2019s website.<\/p>\n

5.
\nIn the meantime, all banks are advised to take immediate steps to update
\ncustomer information so as to facilitate sending alerts through electronic
\nmodes (SMSs\/emails etc) for effective implementation of the guidelines.<\/p>\n

Yours
\nfaithfully<\/p>\n

(Lily
\nVadera)
\nChief General Manager<\/p>\n

<\/a>Annex<\/strong><\/p>\n

Levy
\nof charges for non-maintenance of minimum balance in savings bank account shall
\nbe subject to the following additional guidelines:<\/p>\n

(i)
\nIn the event of a default in maintenance of minimum balance\/average minimum
\nbalance as agreed to between the bank and customer, the bank should notify the
\ncustomer clearly by SMS\/ email\/ letter etc. that in the event of the minimum
\nbalance not being restored in the account within a month from the date of
\nnotice, penal charges will be applicable.<\/p>\n

(ii)
\nIn case the minimum balance is not restored within a reasonable period, which
\nshall not be less than one month from the date of notice of shortfall, penal
\ncharges may be recovered under intimation to the account holder.<\/p>\n

(iii)
\nThe policy on penal charges to be so levied may be decided with the approval of
\nBoard of the bank.<\/p>\n

(iv)
\nThe penal charges should be directly proportionate to the extent of shortfall
\nobserved. In other words, the charges should be a fixed percentage levied on
\nthe amount of difference between the actual balance maintained and the minimum
\nbalance as agreed upon at the time of opening of account. A suitable slab
\nstructure for recovery of charges may be finalized.<\/p>\n

(v)
\nIt should be ensured that such penal charges are reasonable and not out of line
\nwith the average cost of providing the services.<\/p>\n

(vi)
\nIt should be ensured that the balance in the savings account does not turn into
\nnegative balance solely on account of levy of charges for non-maintenance of
\nminimum balance.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

RBI has issued a notification which makes the banks mandatory to inform the customer immediately on the balance in the account breaching minimum balance and the applicable penal charges for not maintaining the balance by way of SMS\/Email\/letter. When the minimum balance is not maintained within one month from the date of notice of shortfall, … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[10],"tags":[175,324],"class_list":["post-597","post","type-post","status-publish","format-standard","hentry","category-banking","tag-bank","tag-charges"],"yoast_head":"\n