Keep your bank account adequately funded to avoid penalties
In the last three years, savings account holders have paid nearly Rs 10,000 crore to banks as penalties for not maintaining the minimum balance, according to the numbers presented by the government in the Lok Sabha. This is a huge amount collected by banks from account holders as penalties. Of the total amount, 18 public sector banks collected Rs 6,155 crore. Four major private sector banks have collected Rs 3,567 crore as a penalty for non-maintenance of minimum balance.
The New Indian Express carried a report dated July 23, 2019, which mentions one Mahesh Kumar, 38, residing in Bengaluru, being fined by his bank in 2017 for not maintaining the minimum balance in his savings account. In September 2016, his son Shreyas was asked to open an account by his school at a particular private bank branch for receiving his scholarship. Kumar opened a joint savings account with his son. While opening an account, Kumar deposited Rs 1000 as it was the minimum balance that was required to be maintained in the bank account. However in April and July 2017, without intimating Mahesh, the bank had deducted Rs 114 and Rs 371 respectively as penalty, stating that the minimum balance was not maintained in the account. He got to know of this only in July 2017, while updating bank passbook by visiting the branch. While inquiring about the charges, the bank branch manager informed that the minimum balance in savings account was hiked to Rs 3000 from Rs 1000 earlier and all customers were informed by SMS/email as per RBI guidelines. However, Kumar did not receive any SMS or email communication from the bank about it. He complained to the bank branch with proof and the bank reversed the deducted penalty amount by the end of July 2017. The story doesn’t end there.
In July 2017, Kumar deposited an additional Rs 2000 in the savings account to meet the bank’s minimum balance norms. But, in the months of September and October of 2017, the bank again charged Rs 79 and Rs 2, respectively, stating that they were penalties for non-maintenance of minimum balance in the account. Later, Mahesh decided to raise a complaint against the bank on minimum balance penalty debited from his account with the consumer forum. Recently, Mahesh won the case against the bank, as he had all the evidences in his favour. The Rs 81 deducted from the account was reversed by the bank. The forum imposed a penalty of Rs 6000 on the bank. It was to be paid to Mahesh and included Rs 1000 as compensation and Rs 5000 as litigation cost incurred.
RBI guidelines for levying penalty