Levy of Penal Charges on Non-maintenance of Minimum Balances in Savings Bank Accounts only after 1 month notice from 1st April 2015

india Savings Bank a/cRBI has issued Cric­u­lar No 3/12.05.001/2014–15 dat­ed Decem­ber 12, 2014 regard­ing guide­line on Levy of charges for non-main­te­nance of min­i­mum bal­ance in sav­ings bank account shall be sub­ject to the fol­low­ing addi­tion­al guide­lines. The guide­lines will come into effect from April 1, 2015.

i) In the event of a default in main­te­nance of min­i­mum bal­ance / aver­age min­i­mum bal­ance as agreed to between the bank and cus­tomer, the bank should noti­fy the cus­tomer clear­ly by SMS / email / let­ter etc. that in the event of the min­i­mum bal­ance not being restored in the account with­in a month from the date of notice, penal charges will be applic­a­ble.

ii) 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.

iii) The pol­i­cy on penal charges to be so levied may be decid­ed with the approval of the Board of the bank.

iv) The penal charges should be direct­ly pro­por­tion­ate to the extent of short­fall observed. In oth­er words, the 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. A suit­able slab struc­ture for recov­ery of charges may be final­ized.

v) It should be ensured that such penal charges are rea­son­able and not out of line with the aver­age cost of pro­vid­ing the ser­vices.

vi) It should be ensured 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.

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