Wednesday, August 10, 2011

Zero balance in a/c need not worry you anymore

BANGALORE: The high court on Tuesday observed that banks recovering penal charges from customers not maintaining minimum balance in their accounts might have to pay back the amount with penal interest once the RBI comes out with its decision.

The court's observation came following a public interest litigation (PIL) filed by T S Muthukrishnan. The petitioner contended that in the name of non-maintenance of minimum balance, banks levy hefty penal charges. The petitioner said it is obvious that only the poor man, who struggles to make "both ends meet", doesn't maintain minimum balance. A division bench presided by Chief Justice J S Khehar, while disposing of the PIL, said: "The final determination will only emerge after objections from the stakeholders. It is apparent from the recommendations in the Damodaran Committee report that the final determination may relate to levy of penal charges. The issue has financial indications.

The banks concerned would be advised not to levy penal charges till Reserve Bank of India (RBI) lays down parameters."

The RBI counsel informed the court that objections have been invited from the customers and the banks concerned and a final decision will be taken after that.

The court observed that since the issue of maintaining minimum balance and penal charges also finds mention in the Damodaran Committee report, the RBI would take a decision.

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