2. Bombay High Court has brought to our notice that banks fix a limit on total credits in zero balance accounts opened for students studying in primary, secondary / higher secondary schools and technical institutions. Resultantly, in cases where scholarship amounts exceed the credit limit, banks do not allow the credit and return the amount to the disbursement account of the Government. Further, in some cases banks are reported to have closed zero balance accounts unilaterally without intimating student beneficiaries concerned. Instances of banks refusing to open zero balance account for students have also been brought to our notice.
3. As directed by the Bombay High Court, Regional Rural Banks and State / Central Cooperative Banks are hereby advised to ensure that accounts of all student beneficiaries under the various Central/State Government Scholarship Schemes are free from restrictions of ‘minimum balance’ and ‘total credit limit’.
4. Please acknowledge receipt to our Regional Office.