Banks are not supposed to charge a penalty in case of inoperative accounts (no transaction happened for two years) as per RBI master circular issued in 1 July 2014. Therefore, time and again we have advised our readers to close the bank accounts, which they are not operating. As she didn’t want to operate that account, she didn’t even transfer money in the account. Reena did get messages from HDFC Bank, saying penalty charges will be levied for non-maintenance of minimum balance but like most other people she couldn’t take out the time to visit the branch and close the bank account due to the lockdown. The charges are divided into four slabs, including these two.īanks are supposed to intimate their customers through SMS, email, letter or through other mediums that penal charges will be levied in case of non-maintenance of minimum balance. So, if the AMB is below ₹2,500 in an urban branch account, the charges are ₹600 per month while if the AMB is less than ₹10,000 but above ₹7,500, the charge is ₹150.

“RBI has directed banks to charge proportionally as per the difference between the actual balance and minimum account balance requirement,' said Raj Khosla, CEO,, a financial services provider.įor example, HDFC Bank has an average monthly balance (AMB) requirement of ₹10,000 for urban branch accounts while for semi-urban branch accounts the requirement is ₹5,000. The non-maintenance charges vary for urban, semi-urban and rural branch customers as well as there are various slabs of charges depending on the average monthly balance requirement and the shortfall. Banks charge different charges based on the location of the account.

The penal charges have to be approved by the bank’s board. In response to a query in Lok Sabha, in July 2019, the finance ministry had said that 18 public sector banks and four privately-run banks charged around ₹10,000 crore as penalty on non-maintenance of minimum balance in the past three years.īanks are allowed to charge non-maintenance of minimum balance penalty to the customers but there is no cap on the charges. There are many people who are changed for non-maintenance of minimum balance in their savings accounts every year. We wrote two emails to HDFC Bank on how her account was showing negative balance along with the details of Reena’s account, however, both the mails remain unanswered till date. Reena approached HDFC Bank and her money was partially refunded and she was informed through a mail that if she continues to maintain the minimum balance, the remaining charges deducted will also be refunded. “It should be ensured that the balance in the savings account does not turn into negative balance solely on account of levy of charges for non-maintenance of minimum balance,' said the RBI notification. The balance in a savings bank account can’t be negative because of the non-maintenance of minimum balance charges, as per the Reserve Bank of India’s notification issued in November 2014.

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