Press Information Bureau

Government of India

Ministry of Finance

25-November-2016 17:26 IST

Reserve Bank of India (RBI) vide its circular dated August 10, 2012 on Financial Inclusion – Access to Banking Services – Basic Saving Bank Deposit Account, advised all Scheduled Commercial Banks to offer a ‘Basic Savings Bank Deposit Account’ which shall not have the requirement of any minimum balance. In terms of aforesaid circular, banks have been advised to offer Facility of ATM card or ATM-cum-Debit Card to all BSBD account holders without any charges.

In other cases, as per extant instructions, with effect from April 1, 2015, banks have to follow additional guidelines on levy of penal charges for non-maintenance of minimum balance in savings bank account which include – notifying the customer clearly by SMS/email/letter etc. that in the event of the minimum balance not being restored in the account within a month from the date of notice, penal charges will be applicable; penal charges may be recovered under intimation to the account holder; the policy on penal charges to be so levied may be decided with the approval of Board of the Bank and the penal charges should be directly proportionate to the extent of shortfall observed. It should be ensured that such penal charges are reasonable and not out of line with the average cost of providing the services. 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.

This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

*****

DSM/KA

Basic Savings Bank Deposit Account: banks must offer no minimum balance accounts and free ATM facility; penal charge limits apply. Reserve Bank guidance requires banks to offer a Basic Savings Bank Deposit Account without any minimum balance and to provide ATM/ATM cum debit cards free. For other savings accounts, guidelines effective April 1, 2015, allow penal charges for non maintenance of minimum balance only after customer notification that shortfall must be restored within one month; penal recovery must be notified to the account holder; the Board must approve penal policy; charges must be proportionate to the shortfall, reasonable relative to service cost, and must not render the account balance negative solely due to such charges.