A Secret Your Bank Doesn’t Want You to Know
Banks charging fines for not maintaining the minimum balance is often illegal, and customers can file complaints with the RBI if their accounts go into negative due to such charges.
Many of us are familiar with the frustration of being charged fines by banks for not maintaining the minimum balance in our accounts. Banks often impose these charges when the balance falls below the required amount, and it becomes a major source of income for them. But what if we told you that this practice could be illegal?
Here’s a secret that your bank may not want you to know: charging fines for not keeping the minimum balance is not entirely legal, and there’s something you can do about it.
What the RBI Says About Minimum Balance Fines
In 2014, the Reserve Bank of India (RBI) issued clear guidelines to protect customers from unfair charges. According to the RBI, if your bank account balance drops to zero, they cannot charge you fines or penalties. The RBI made it clear that if a customer forgets or is unable to maintain the required balance, banks should not take unfair advantage of the situation.
Instead, banks are required to inform the customer through SMS, email, or letters about the required minimum balance and any fines that might apply if the balance is not restored. Customers are given one month from the notice date to restore the minimum balance.
What Happens After One Month?
If you still don’t maintain the minimum balance after the one-month notice period, banks can charge a fine. However, RBI rules require these charges to be reasonable and in line with the cost of providing services. These charges should be a small percentage of the difference between your current balance and the required minimum balance.
Banks are also instructed not to let your account balance go below zero due to these charges. Instead of imposing heavy fines, they should limit certain services, such as withdrawals or transfers, until the balance is restored. Once the required balance is back, the bank should offer full services again.
What to Do if You Have a Negative Balance
Sometimes, accounts go into negative balances when customers change jobs, and the regular deposit of money into the account stops. As a result, the bank imposes fines for not maintaining the minimum balance, which can cause the account balance to dip into negative.
While banks generally do not try to recover money from accounts with negative balances, this can still be a loss for the customer. Many major banks in India, such as HDFC, Axis, and ICICI, claim they do not allow accounts to go into negative due to fines for low balances.
How to Protect Yourself
If you ever face a situation where your account balance has gone negative due to fines, you have the right to challenge this. You can contact your bank and ask them to reverse the charges. If the bank refuses to do so, you can file an official complaint on the RBI’s complaint website.
Next time, if you or anyone you know faces the issue of a negative balance due to a minimum balance maintenance fine, remember: you can take action. Stand up for your rights and protect yourself from unfair charges.
So, don’t let the banks take advantage of you – stay informed and make sure they follow the rules.
