No penalties on customers not maintaining minimum balance in banks in India

The Reserve Bank of India today asked banks not to levy penalties on customers who don’t maintain a minimum balance in any inoperative account, as part of a consumer protection initiative.

A notification issued by the apex bank said that 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 accounts and restore the services when the balances improve to the minimum required level.

Several banks including the State Bank of India already do not levy any charge if the minimum balance is not maintained.

In order to promote the objective of financial inclusion, RBI has also simplified rules regarding opening and operating minors’ accounts. In a separate notification, it has advised banks that minors above the age of 10 years may be allowed to open and operate savings bank accounts independently. But, keeping in view the risk management system, banks may fix limits in terms of age and amount up to which minors may be allowed to operate the deposit accounts independently.

Banks will also be free to offer additional banking facilities like internet banking, ATM/ debit card, cheque book facility etc., subject to the safeguards that minor accounts are not allowed to be overdrawn and that these always remain in credit.

RBI had earlier permitted minors to open fixed and savings deposit bank account with mothers as guardian.

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