No penalty for below minimum balance: RBI

Mangalore Today News Network

Mumbai, April 2, 2014: The Reserve Bank of India (RBI) on Tuesday asked banks not to levy penalty on customers who don’t maintain minimum balance in basic savings bank accounts.

As part of a consumer protection initiative, RBI Governor Raghuram Rajan said: “Banks should not take undue advantage of customer difficulty or inattention.”

Releasing the first bi-monthly monetary policy statement for 2014-15, Rajan said: “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 balance improves to the minimum required level.”

Banks, he added, should also not levy penalty if minimum balance is not kept in any inoperative account. The liability of customers should be limited in electronic banking transactions in cases where banks are not able to prove customer negligence, added Rajan.