No penalties for bank balance below minimum limit

No penalties for bank balance below minimum limit

There is good news for the Indian citizens. In its first bi-monthly policy on 1st April, 2014, The Reserve Bank of India has asked banks not to levy any penalty charges for non-maintenance of the minimum balance in the bank accounts. The RBI has instructed to limit the services to such accounts. The step that is taken for the consumer protection is really beneficial for the common man or will add to its woes in future. Banks consider that it is better to charge penalty rather than limiting services. What is your view?

Yes

• Banks also have a right to make profit so as to survive in the tough economy. They need to reach the break-even to provide better services to the consumers.

• If the banks will start limiting the service to the account holders then they will have to face a lot more inconvenience every now and then. They have to make requests for every service separately.

• Banks bear a cost for every account whether it maintains the balance or not. The penalties are a way to cover the operational costs.

• It encourages the consumers to close the old and dormant accounts that are not in use from years.

• The consumers might have to pay more than the penalty amount if banks actually start limiting the services.

No

• It is ok to limit the services and remove penalties as it will give the freedom to consumers to choose the type of services they want.

• The middle class people have the obligation to keep a bank account but they cannot keep up the minimum balance.

• If we want to encourage consumers to use banking facilities and talk about financial inclusion, then it is necessary to be lenient in this case.

• People always need basic account for many other purposes and therefore it is going on from years that you cannot charge for not maintaining the balance.

• The penalties are so high that the people who fall under low income group cannot afford to keep the bank accounts.

Conclusion

It is necessary to keep a good balance between the consumer’s interest as well as the bank’s interest. Charging penalties is at least a better bet than limiting the services that can add to the extra costs to the consumer’s pockets for using the account services.