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Consumers
beware!
I have always maintained a good balance in my savings bank account. Recently, due to some medical emergency in the family, I incurred a lot of expense and therefore the balance came down. Suddenly now the bank has sent me a letter asking me to pay penalty for not maintaining minimum balance in the account for the last six months. Till I got that letter, I was not even aware of the minimum balance requirement, nor was I told about any penalty that they would levy. Are there any RBI guidelines on this? First and foremost, the bank had a duty to inform you of the minimum balance requirement and the penalty incurred for not ensuring it. If you look at the Reserve Bank of India circular, dated December 26, 2012, titled "Minimum balance in savings bank accounts" , it clearly mandates banks to be transparent and inform customers of this. The bank's failure to respect your right to information as well as the banking regular's instructions, clearly constitutes deficiency in the service provided by the bank.
I must also mention that only in April this year, in his first bi-monthly monetary policy statement for 2014-2015, the RBI governor Raghuram Rajan advised banks not to take undue advantage of customers' difficulty or inattention and impose penalty for non-maintenance of minimum balance requirements in ordinary savings bank accounts. "Instead of levying penal charges for non-maintenance of minimum balance in ordinary savings bank accounts, banks should limit services available on such accounts to those available to Basic Savings Bank Deposit Accounts and restore the services when the balances improve to the minimum required level", he said. I wish the governor had also suggested penalties for banks that fail to inform customers of the minimum balance requirement! A basic savings bank deposit account is a 'no-frills accounts' which only allows cash deposit and withdrawal and does not provide any other service including provision of cheque books. I must also mention that the RBI, in its notification of May 6, 2014, has also said that banks henceforth are not permitted to levy penal charges for non-maintenance of minimum balance in an inoperative account. My son had an account in a private bank for the purposes of his salary , which used to be credited into it. After he quit that job , he never operated that account and now, after two years he gets a legal notice from the bank for his failure to pay the penalty for not maintaining the minimum balance in his account. Apparently, they enhanced the minimum balance requirement last year, but he was not informed of it. What are his options? The RBI circular of December 26, 2012, instructing banks to be transparent, applies to informing consumers of any change in the minimum balance requirement too. So here again, the bank is guilty of deficient service and your son can take it up with the nodal officer, and if necessary , the banking ombudsman or the consumer court. I must also mention here, the RBI circular of August 22,2008, which says that if there are no operations in an account for over a year, then the bank should write to the customer and find out the reasons for it. If there is no response from the customer and if there are no transactions for over two years, the bank should declare that account as an 'inoperative account' (after informing the customer of it) and pay savings bank interest on the amount. Obviously, the bank did not follow this instruction either. So your son can take the bank to task for not following these instructions of the regulator too. Having said that, I would advise all consumers to close any account that is not in operation or not required.
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So you do not have to
pay any penalty, on the other hand, the bank has to pay you
compensation for the deficient service rendered and for harassing you.
Write to the nodal officer of the bank, bringing this matter to his
notice. If he fails to respond positively, complain to the Banking
Ombudsman, highlighting the bank's failure to follow RBI instructions.