- Determining their Deposit as well as Lending interest rate i.e. to have their own set of interest rates subject to certain ceilings
- Fixing Minimum Average Balance (MAB) required to be maintained in different categories of accounts
- Prescribing all types of service charges with the approval of the respective Board of Directors.
In fact general customers do not have any problem with any matter except when Bank raises MAB as after raising MAB, they start charging non maintenance charges i.e. in case anyone violates that requirement – which becomes very expensive for ordinary customers. As such corrective measures are required to prevent hardship considering below points because of which customers find it hard to close their savings account immediately :–
1. Now a days due to Government initiatives so many types of subsidies gets credited directly to Savings account.
2. There are other incomes also such as Dividend, Interest, House rent etc. which gets direct credited to savings account.
3. Life Insurance benefits such as payments related to money back policy or Survival benefit also gets credited directly to savings account.
4. Similarly Debenture / Bond redemption also gets credited directly to savings account.
5. Income tax dept. also started crediting refund amount directly to savings account.
6. Customer also gets uploaded their instruction for direct debit towards:–
a. Electricity Bill
b. Water Bill
c. School fees
e. Vehicle loan installment
7. Besides above few other payments gets debited on regular basis directly such as Postpaid Mobile bill, Landline bill, internet bill etc as per registered instruction.
8. Customers also issue post dated cheques towards so many types of liabilities.
Due to above cited reasons RBI is requested to ensure the following:–
A. Bank should dispatch notice to all customers three months in advance stating therein date from which increased MAB will become effective and this posting should be foolproof, mere pasting over Branch Notice Board should not be considered sufficient.
B. Bank should start charging charges from existing customers only after one completed full year of receipt of notice OR date from which increased MAB is applicable.
Banks are free to introduce revised MAB as per their choice of date without any hurdles as the above restriction is only to provide breather to existing customers to either continue with proposed revised provision or submit account closure request. The proposed time would allow customers to replace their existing account details with another account (of which MAB suits their budget) from all places wherein they have given the concerned account details of which MAB has been increased and they do not wish to continue that account.
It is opined that RBI set an example of regulation by considering aforementioned points and should try to protect their own decision which they took about an year ago (widely circulated by print media recently). This can be achieved by developing suitable mechanism so that no bank should henceforth collect charges on MAB requirement.