The Reserve Bank asked banks to inform their customers about fall in minimum balance well in advance and said that penal charges should be levied only to the extent of shortfall in such balances. The guidelines with respect to levying of penal charges for non-maintenance of minimum balance will come into effect from 1 April, 2015.
RBI said the penal charges should be directly proportionate to the extent of shortfall observed. Charges should be a fixed percentage levied on the amount of difference between the actual balance maintained and the minimum balance as agreed upon at the time of opening of account. In the event of a default in maintenance of minimum balance, the bank should notify the customer clearly by SMS/email/letter, giving them time period of one month to restore the balance so as to avoid penal charges. In case the minimum balance is not restored within a reasonable period, which shall not be less than one month from the date of notice of shortfall, penal charges may be recovered under intimation to the account holder.
RBI further directed banks to ensure that such penal charges are reasonable and not out of line with the average cost of providing the services. Also, they should ensure that the balance in the savings account does not turn into negative balance solely on account of levy of charges for non-maintenance of minimum balance.
It also asked all banks to take immediate steps to update customer information so as to facilitate sending alerts through SMS or emails for effective implementation of the guidelines.