)
You changed jobs and moved cities, but didn't bother closing your salary account. After all, there is not much money in it. Besides, the bank also deducts charges as penalty for not maintaining the minimum balance.In fact, you are worried that you will have to pay additional penalty if you go back to close the account. But not anymore. The Reserve Bank of India has asked banks not to levy penal charges for non-maintenance of minimum balances in any inoperative account.
According to the RBI, there is an estimated Rs 3,500 crore worth of unclaimed deposits lying with banks. With this rule, it is possible that some of these accounts could be reactivated,says A Surendran, Head-Retail & International Banking, Federal Bank.Accounts remain inoperative if the account holder changes jobs, shifts to another city, or sometimes shifts to another bank if he or she is not happy with the service.
An account that does not see any transaction for six months to one year is classified as inoperative ordormant. But the bank has to maintain it and pay the interest on it. Thanks to technology and integration of systems, if any money comes into the account, then the charges get deducted automatically. That is why account holders often find that the balance in inoperative accounts get depleted even if they don't withdraw it.
In fact, there are lots of cases where the amount in the account goes into negative, because the amount is lower than the minimum balance and the deposit holder has not closed the account due to sheer inertia, says Harsh Roongta, CEO, Apnapaisa.com. "There are lots of inoperative accounts with large amounts. In such cases there is not issue because it more than the minimum balance requirement,'' he says.
In inoperative accounts, the amount is classified as unclaimed deposit after 10 years of the account turning inoperative and the fund is transferred to Depositor Education and Awareness Fund Scheme opened by RBI. However, banks have not started transferring funds as the proposed scheme is yet to be notified by the government, Surendran says.The quarterly minimum balance to be maintained in savings bank accounts ranges from as low as Rs 1,000 to Rs10,000. It is usually lesser in case of public sector banks as compared to private or foreign banks.
If your account is in a urban branch then the minimum balance requirement is higher than in a rural branch. The charges for non-maintenance of minimum balance ranges anywhere between nil to Rs 350. It is nil for no frills accounts or accounts where there are not additional facilities like cheque books or ATM card. The reason why banks charge a penalty for non-maintenance of minimum balance is because they incur costs for maintaining accounts.
One is capital cost for keeping records and recurring operational costs for returning cheques that may be returned to insufficient balance or attending queries regarding the account. Last year, Federal Bank organised acampaign for revival of inoperative accounts and managed to revive about 200,000 accounts across domestic and NRE categories.
"We contacted our customers and waived off the penalty on non-maintenance of balance in operative accounts. We consider it again because it is cheaper than getting new accountsopened. And this way we maintained the relationship with our customers,''Surendran says.
