The Reserve Bank of India has asked all commercial banks not to penalise account holders who do not maintain a minimum balance in their dormant accounts.
The central bank stated that banks should not take advantage of customer difficulty or inattention. Several financial institutions, such as State Bank of India, already comply with the decision, which is part of a consumer protection initiative.
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The Reserve Bank of India stated: "It is advised that henceforth banks are not permitted to levy penal charges for non-maintenance of minimum balances in any inoperative account."
However, for operative accounts, customers of ICICI Bank and HFFC Bank are charged INR750 ($12.49) per quarter if they don’t maintain a minimum average quarterly balance of INR10,000 in urban centres and INR5,000 in semi-urban areas.
The central bank asked that interest rate paid on saving banks accounts to be calculated on the daily minimum balance instead of the earlier practice of paying interest on quarterly balances.
The Reserve Bank of India also stated that banks should limit the liability of customers in electronic banking transactions in cases where banks are not able to prove customer negligence.
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