RBI on it Circular stated that from now onwards Banks cannot levy penality charges on non-maintenance of minimum balances in inoperative Accounts.
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)
[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.