Question : Minimum Account Balance

(a) the details of the norms and guidelines regarding penalty charges for non-maintenance of minimum balance in bank accounts;
(b) the amount of penalty collected by penalising people for not maintaining minimum balance in their account during the last one year, bank/account-wise;
(c) whether the Government is aware that Minimum Account Balance (MAB) penalties demotivates lower and middle class people for payment through bank accounts and if so, the action taken thereon; and
(d) whether various irrational extra charges for basic services like issuance of cheque books etc. are being levied by banks and if so, the action taken by the Government to address the issue?

THE FINANCE MINISTER


(a) to (d) A Statement is laid on the Table of the House.


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Statement referred to in reply to parts (a) to (d) of Lok Sabha Starred Question No. *8 (8th Position) for 2 February 2018 by Shri Abhishek Singh, regarding “Minimum Account Balance”.

(a) According to Reserve Bank of India (RBI) guidelines, banks do not have any Minimum Balance requirement for Basic Savings Bank Deposit accounts (BSBD), including accounts opened under Pradhan Mantri Jan DhanYojana (PMJDY). In September 2017, there were 52.2 crore BSBD accounts including 30.31 crore Jan-Dhan accounts. Hence, for these accounts there are no charges for not maintaining minimum balance.
For other savings accounts, banks are allowed to decide the policy on levy of charges on non-maintenance of minimum balances with the approval of their Boards. Banks have to ensure that such charges are reasonable and in line with the average cost of providing the services.
(b) The information in respect of requirement of quarterly average balance and respective charges for non-maintaining the same for accounts other than BSBD/Jan-Dhan accounts by Public Sector Banks (PSBs) and major private sector banks is shown in Annexure. The requirement of minimum average balance for PSBs is seen to be comparatively lower. Further, the rate of such charges is generally lower in case of rural and semi-urban areas as compared to the urban and metro areas.
The amount of charges collected by Public Sector Banks (PSBs) for not maintaining minimum balance in savings accounts during financial year 2016-17 and 2017-18 (April to November, 2017) is also given at Annexure.
(c) As stated in (a) above BSBD accounts and accounts opened under PMJDY do not have minimum balance requirement. People can use the above kinds of account to avoid maintaining minimum balance in their accounts.
(d) As per RBI Master Circular dated 1.7.2014 on customer service in banks, the banks may decide on service charges, with prior approval of their Board of Directors. While fixing service charges for various types of services, banks are to ensure that the charges are reasonable and are in line with the average cost of providing these services. Banks also have to ensure that customers with low volume of activities are not penalised. However, most banks provide several free basic services to customers as per their Board-approved policies.

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