Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in)

No Penality on non-maintenance of minimum balances – RBI

1 min read

RBI on it Circular stated that from now onwards Banks cannot levy penality charges on non-maintenance of minimum balances in inoperative Accounts.
RBI
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Instead of levying penality charges and taking undue advantage of customers situation banks should start limiting their services when the minimum balance is not maintained and the services should be completely restored when the minimum balance restored to the minimum required levels.

Earlier savings bank customers has to maintain with a minimum quarterly average balance of Rs. 10,000 in metro or urban centers, Rs. 5,000 in semi urban centers and Rs. 2,500 in rural centers.The non-maintenance of such adequate balance shall automatically entitle the Bank to levy the charges for non-maintenance of the average balance. in such an event the Bank shall have the first right to set off any available credit that may be available in the account including from amounts flowing into the said account from the collection proceeds or any deposits

What is Quarterly Minimum Balance?

It simply means the average of the all the closing day balance in a given quarter. So given a quarter, add up all the closing day balance and then divide it by the number of days in the quarter.

QAB = (Total of all the EOD closing balance)/(number of days in quarter)

quarterly average balance
[Source : Jagoinvestor]

Currently customers of Private banks like Axis Bank, ICICI Bank and HDFC Bank are charged some times can be as high as Rs 750 per quarter if they don’t maintain a minimum average quarterly balance .It is noted that the State Bank of India does not levy any charge for non-maintenance of a minimum balance in the basic savings account. And Most of the PSU Banks non-Maintenance Charges are very low around Rs 50-100 only

Defintely a right move from RBI.

Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in)

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6 Replies to “No Penality on non-maintenance of minimum balances – RBI”

  1. Can I have more on this bank has charged me heavy charge due to non maintenance of AMB/ AQB in my saving account …

    Pls share if any guidelines stated by RBI…

  2. i had a salary a/c with kotak bank and i got my last salary i feb 2014 in this a/c after that if the salary will not be credit in the a/c for 2 or more month you need to maintain rs 10000 average balance starting from may onwards so my question is are banks allowed to charge non maintenance fees how i can disputeon this

  3. I ,ve a saving acnt in hdfc, Doomdooma brance,Assam thorough this acnt I am paying a small EMI of two wheeler in time without any default but not maintained the minimum balance . my problem is bank always charges fine from my acnt saying that bank does not have RBI circulars regarding this issue. what can I do?

  4. hi, i had open an account in yes bank as a salary account since past 2 years, after joining the job few month later i left that job, i didn’t maintain the minimum balance since past 2 years, and they started charging for non maintaining minimum bank balance and the amount is around 7000 (per month 490) . i went to bank to close my account for further avoiding charges of non maintaining minimum bank balance. they asked me to pay the charges of non maintaining minimum bank balance then only they will close my account even the RBI had instructed not to charge for non maintaining minimum bank balance. Yes Bank is charging more heavy charges. if any one had solution to avoid these charges please advice.

  5. Deposit in a bank is understood as loan to the bank which is termed as borrowed capital of the bank and utilized for lending as loan mainly. Levying of AMB charges for non maintenance of minimum balance is totally departure from the term of deposit and borrowed capital. The RBI must take notice of act of banking institutions acting beyond the term of deposit or make or illustrate definition of deposit with banks.

  6. Banks are charging charges monthly from the saving deposit account for non maintenance of minimum balance as required by the bank. The RBI i.e. the regulatory authority which require registration of banks has not restricted or framed clear policy keeping in view the definition of bank and depositor.Depositor is understood as loaner of the bank on which bank is required to pay interest, therefore it is not for the bank to fix any limit of minimum deposit balance and on the other side the Bank is understood as an institute which lend money by mainly raising funds from the depositors. The RBI must understand the concept of bank and as an authority of regulation of banks form policy by taking onto consideration the term bank.

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