Mumbai: The Reserve Bank on Tuesday asked banks not to levy penal charges on customers who don’t maintain a minimum balance in basic savings bank accounts and to consider the possibility of prepaying floating rate term loans without any penalty.
The RBI governor said that consumer protection is an integral aspect of financial inclusion and the RBI proposes to frame comprehensive consumer protection regulations based on domestic experiences and global best practices.
Presenting the first bi-monthly monetary policy statement 2014-15 Reserve Bank of India governor Dr Raghuram Rajan said “Banks should also 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.”
Banks should also not levy penal charges if the minimum balance is not kept in any inoperative account, he added.
However Dr Rajan will have to push the banks to accept his suggestion.
In a press briefing by the Indian Banks Association after the bankers’ meet with Dr Rajan, one of the top bankers said “it was only a suggestion and they would wait for the guidelines.”
