RBI to review minimum balance requirements for savings a/cs
August, 30th 2019
The central bank said it will also allow digital onboarding of bank customers, enabling video-based Know-Your-Customer (KYC) for individuals.
The Reserve Bank of India (RBI) will review guidelines on minimum balance requirements for savings accounts as well as the penalty charged by banks for its non-maintenance, the central bank said in its annual report.
Currently, the minimum balance requirement and penalties for non-maintenance vary from bank to bank. Typically, foreign and private lenders charge as high as Rs 600 while their public sector peers charge much less. The average monthly balance also varies for branches in metro, urban, semi-urban and rural areas.
As per existing norms, banks must notify the account holder through SMS/email or a letter and allow a month's time to restore the balance. The bank should also notify the account holder if the monthly balance requirement is changed.
On June 10, the RBI had eased some norms relating to basic savings bank deposit accounts (BSBDA). These included allowing minimum of four withdrawals in a month, issuance of an ATM or ATM-cum-debit card and no limits on number or value of deposits that can be made in a month.
Savings accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) and BSBDA are exempted from fines levied for non-maintenance of minimum balance.
In past three years, savings account holders have paid nearly Rs 10,000 crore to banks as penalties for not maintaining the minimum balance, according to the numbers presented by the government in the Lok Sabha. Of this, 18 public sector banks collected Rs 6,155 crore, while four big private sector banks collected Rs 3,567 crore.
The central bank said it will also allow digital onboarding of bank customers, enabling video-based Know-Your-Customer (KYC) for individuals. The digital account opening for new customers had taken a hit after the Supreme Court ruling on usage of Aadhaar card by banks last year.