What changed
RBI has prohibited RRBs from imposing penal charges for non-maintenance of minimum balance in any inoperative account. Earlier, RRBs were advised that no charge should be levied for non-operation/activation of Basic Savings Bank Deposit Accounts (BSBDAs). This extends the prohibition on penal charges for minimum balance shortfall to all inoperative accounts.
What it means for you
RRBs must immediately stop deducting penalties from inoperative accounts that fall short of minimum balance requirements. This reduces fee income from dormant accounts but aligns with consumer protection goals. Banks should update their system logic and customer communication to reflect this change.
What you must do
- Update internal policies and system rules to disable penal charges on all inoperative accounts for minimum balance shortfall.
- Communicate the change to branch staff and ensure no such charges are levied going forward.
- Align customer account opening disclosures to clearly state that inoperative accounts will not attract minimum balance penalties.
Who it affects
Regional Rural Banks (RRBs), Customers holding inoperative savings accounts at RRBs, RRB compliance and operations teams
Does this circular apply to all types of accounts or only savings accounts?
The circular refers to 'inoperative accounts' in the context of savings bank accounts, as it references earlier guidelines on minimum balance in savings accounts. It does not explicitly cover current or term deposit accounts.
What is the definition of an 'inoperative account' for this purpose?
The circular does not define 'inoperative account'. Banks should use the existing RBI definition as per other circulars.
Are RRBs still allowed to charge penalties on active accounts for minimum balance shortfall?
Yes, the circular only prohibits penal charges on inoperative accounts. Active accounts remain subject to the bank's disclosed minimum balance charges, provided they are transparently communicated at account opening.