12 May 2016

No more negative balance in Saving Accounts – RBI Directive

If you are a salaried employee and have changed you Job in past, you might realize the pain of going back to the Bank where your first salary account existed and then asking them to close your account  in order to prevent the bank from charging you for non-maintenance of the salary accounts or the saving accounts.

As per a directive from RBI, The banks have been asked to stop charging penalties for non-maintenance of saving accounts when the account balance reaches Zero. Banks usually charge non-maintenance fees even when the account balance falls to zero, which leads to negative balance in the customer’s saving account.

Most of the banks offer special fee concessions and schemes for salary accounts. But once the customer changes his job or changes the bank for his salary account, the salary account is converted to a saving account with fewer special offers and concessions compared to a salary account. At this stage, when the saving account ceases to maintain the minimum balance requirement, the bank starts charging the account with a penalty for non-maintenance of the account.

At one point of time, even when the account balance reaches Zero, still the account is charged with the so-called non-maintenance fee which leads to account balances becoming negative.


Though the Banks have never been seen engaged with the recovery of this negative balance, but whenever in future the customer deposits any amount in his dormant account, the deposited amount is reduced in order to balance the negatives thus adding to the woes of the customers.

Now a days, when the process of opening a bank account has become much easier, at the same time, it has become much more cumbersome for an individual to operate multiple bank accounts under his name. Thus leading to this kind of situation, where customers usually forget about one or two bank accounts which they do not operate frequently. For example, Consider that you were living in southern part of India and had a bank account in a bank which is literally absent in northern region of the country. Now that you have moved to northern region of India for some reasons, You will obviously end up opening a bank account in another bank which has more reach in your locality compared to the previous bank. As a result you would end up paying non-maintenance charge for your dormant account.

This directive comes as a big relief to the customers who end up paying extra penalty for not operating their saving account. The directive to stop charging a saving account when the account balance is zero seems fair enough.

But what’s your take on it? Do let me know by commenting below this post…
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