RBI: Banks must not punish non-maintenance of minimum balance
In major consumer protection initiative the Reserve Bank of India (RBI) on Tuesday asked banks not to levy penal charges on customers who don't maintain a minimum balance in basic savings bank accounts.Updated: Apr 01, 2014 23:17 IST
In major consumer protection initiative the Reserve Bank of India (RBI) on Tuesday asked banks not to levy penal charges on customers who don't maintain a minimum balance in basic 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," RBI Governor Raghuram Rajan said in first bi-monthly monetary policy statement for 2014-15 in which he kept interest rates unchanged.
Some bankers see it has a good move.
“The direction is very clear that you create a set of accounts where you don't charge for maintaining a balance, but you will be allowed only these services. For any additional services, probably you have to pay," said KR Kamath, chairman and managing director of Punjab National Bank.
Others feel the customers could end up paying more if the banks were allowed to charge for services.
“The alternative is then you will charge for services such as cheque books and ATM transactions. If I start charging for these services, you will actually end up paying more to the bank," said Aditya Puri, MD and CEO of HDFC Bank.