No Negative Balances in Savings Accounts RBI

1
No negative balances in savings accounts RBI
2

• MUMBAI Negative balances in savings accounts due
  to penalty charges are now history following a
  directive from the central bank. The RBI has
  asked banks to stop imposing charges for
  non-maintenance of minimum balance once the
  balance in a savings account touches zero.

3

• Although the norms came into effect last year,
  some banks were continuing with the practice of
  creating negative balances in savings accounts
  until recently. According to the RBI, if any bank
  continues to debit charges on a savings account
  creating a negative balance, customers can
  approach the banking ombudsman. Most banks
  contacted by TOI said that they do not create a
  negative balance in savings bank accounts.

4

• Savings account usually go into negative balances
  when the customer changes his job and his 'salary
  account' ceases to receive funds. Most banks
  offer special facilities for salary accounts,
  waiving the minimum balance requirement. But when
  the customer quits his job, the account ceases to
  be a salary account and the bank begins to apply
  minimum balance requirements.

5
Since there is no regular salary flowing in, The
bank begins to debit a penalty for
non-maintenance of minimum balance, which often
results in the balance turning negative. Although
banks do not pursue recovery of the amount due
under negative balance accounts, the customer
stands to lose if he deposits funds into the
account.
6

• The RBI had in 2014 revised its guidelines for
  banks imposing penal charges for non-maintenance
  of minimum balance in a Savings Account.
  Subsequently, with effect from April 1, 2015, it
  had asked banks not to take undue advantage of
  customer difficulty or inattention and to give an
  advance notice to the customer before deducting
  charges from their bank balance. It had asked
  banks to send notice either by SMS, email or a
  letter. However, some banks had continued to
  impose charges resulting in the balance in a
  savings account turning negative.

7
Source http//timesofindia.indiatimes.com/busines
s/india-business/No-negative-balances-in-savings-a
ccounts-RBI/articleshow/52214982.cms
http//www.facebook.com/idbibank
https//plus.google.com/IDBIBank
https//in.linkedin.com/company/idbi-bank
http//www.twitter.com/idbi_bank
http//www.youtube.com/idbibank

• Thank You!