New Delhi [India], July 7 : Noting that at least five banks have waived the minimum balance requirement after customers "hit back" by looking beyond banks at other avenues to place their savings, Congress leader P Chidambaram on Monday said "what reason could not do, economics has achieved".
In a post on X, Chidambaram, a former Finance Minister, said savings account holders have complained to banks against the government-introduced rule of 'minimum balance' in the account and that some banks earned hundreds of crores of rupees a year "under this obnoxious rule".
He said the banks had been turning a deaf ear to the requests of customers.
"In the last few years, savings account holders have complained to banks against the government-introduced rule of 'minimum balance' in the account, and pleaded for waiver of the rule It was a reasonable request, but banks turned a deaf ear. If a customer failed to maintain a minimum balance, he/she was slapped with a penalty. Some banks earned hundreds of crores of rupees a year under this obnoxious rule," Chidambaram said.
"Customers have hit back with looking beyond banks at other avenues to place their savings. Banks have caved in. At least five banks have waived the minimum balance requirement What reason could not do, economics has achieved! Hurrah!," he added.
There have been reports of bank deposit growth dipping, with customers looking to other avenues for parking their funds to earn higher returns.
According to Reserve Bank of India (RBI) guidelines, banks do not have any minimum balance requirement for Basic Savings Bank Deposit accounts (BSBD), including accounts opened under Pradhan Mantri Jan DhanYojana (PMJDY).
For accounts other than BSBD accounts, as per RBI's Master Circular on "Customer Service in Banks" dated July 1, 2015, banks are permitted to fix service charges on various services rendered by them, as per their Board approved policy, while ensuring that the charges are reasonable and not out of line with the average cost of providing these services.
Banks have been advised to identify basic services and the principles to be adopted/ followed by them for ensuring reasonableness in fixing such charges.
Banks have also been advised to take steps to ensure that customers are made aware of the service charges upfront and changes in the service charges are implemented only with the prior notice to the customers.