The RBI in its monetary policy recommended that banks should not levy penal charges for non-maintenance of minimum balance in ordinary savings bank account and inoperative accounts. Instead, banks should curtail the services available on such accounts to those available to basic savings deposit accounts and restore services only when the balances improve to minimum required levels
Interaction with banks management suggests that non-levy of penal charges for minimum balance maintenance, if applicable, will not have significant earnings impact. For private banks, significant proportion of savings deposits flow from salary accounts where minimum balance is not mandatory. Moreover, loss of penal charges will be offset by some savings from non-provision of additional services.
For banks which do not require minimum balance in any of the savings accounts will not have any financial impact.
