New Delhi: A Parliamentary committee has recommended that banks should not impose penalties for failure to maintain a minimum balance in savings accounts. The committee emphasised that such penalties are excessively harsh and put account holders under unnecessary financial strain, especially the economically vulnerable groups. The committee suggested that the RBI and the Department of Financial Services may consider issuing necessary guidelines on the matter.
The Lok Sabha Petitions Committee said that banks penalise customers disproportionately for not maintaining a minimum balance which causes financial stress on account holders. The committee said that instead of penalising customers for not maintaining a minimum balance, the banks may encourage higher balances by offering reward points, fee waivers and interest rate incentives for customers maintaining consistent deposits.
The committee recommended that all banks whether in the private or public sector, should adopt a uniform policy of not charging penalties from customers for failure to maintain a minimum balance in their savings accounts.
The 15-member committee headed by BJP MP Chandra Prakash Joshi maintained that though almost all public sector banks have decided to waive the minimum balance charges, leading banks have not followed suit. It also noted that the RBI has not issued any direction or guideline on the subject.
The committee has asked the DFS and the RBI to consider issuing necessary guidelines to all banks, including cooperative banks and regional rural banks on the issue.
It is to be noted that the SBI has waived penal charges across all types of savings accounts since March 2020. PSU banks like Bank of Baroda, Bank of India, Central Bank of India, Canara Bank, Punjab National Bank, Indian Bank and Union Bank of India have also waived fees for failing to maintain a minimum balance. Banks like Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab & Sind Bank are considering the move, media reports have said.
