Please go through the RBI guidelines on penalty levied on non-maintenance of minimum balance:
No penalty on customers with lower than minimum account balance says RBI
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The Reserve Bank of India has issued a new directive to banks, directing no penalty on customers with lower than minimum account balance.
The new directive may have come as a big relief for a lot of customers, but banks did not seem amused by the move. Apparently, they believe that the removal of the existing penalty system could make a lot of their banking services more expensive for the end user.
Reserve Bank stated that instead of imposing penalties, banks should limit certain facilities in those accounts maintaining lower than the minimum balance threshold. According to it, these services could always be restored when the customer improve his or her balance to the minimum requirement.
“Banks should not take undue advantage of customer difficulty or inattention. Instead of levying penal charges for non-maintenance of minimum balance in ordinary savings bank accounts, banks should limit services available on such accounts to those available to basic savings bank deposit accounts and restore the services when the balances improve to the minimum required level,” RBI said.
From this, it is evident that banks instead of levying heavy charges, are now coming out with different types of accounts through which various facilities are provided to the customers. Even PSU Banks and many Private Sector Banks have several schemes under Savings and Current Accounts to facilitate customers. It is therefore necessary that customers should properly study the different types of Savings or Current Accounts and opt for the most suitable account.
To quote a few under Savings we have different types viz:
Thus we can see that seamless operations are allowed, let apart customers will have the benefit of Internet Banking, ATM facility, SMS alert facilities and Mobile Banking facilities. Ofcourse this is just illustrative and not exhaustive.
Thus, to conclude, when Zero balance is permitted by some small banks and when they are able to charge less commissions, it obviously means, that
a.They intend promoting their business and in the process provide some concessions to customers.
b.The other facilities or benefits available along with the account will be minimal which could prompt them to extend such benefits.
