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Bank penalty for minimum balance ‘unreasonable’:IIT-B professor’s study

Gurleen Kaur | Monday, January 1, 2018 1:13 PM IST

 Bank penalty for minimum balance ‘unreasonable’:IIT-B professor’s study

New Delhi: Public sector as well as private banks have been imposing unreasonable charges on customers for failing to maintain minimum balance in their
savings accounts, a study by an IIT-Mumbai professor has claimed.The study by Ashish Das shows that some banks like Yes Bank and Indian Overseas Bank
have been imposing penal charges of over 100% per annum on shortfall in maintenance of minimum balance in customers’ accounts.The Reserve Bank guidelines
mandate that charges for non maintenance of minimum balance in savings bank accounts be “reasonable and not out of line with the average cost of providing the
 services”.According to the study: “With many banks charging at an average high rate of 78 per cent per annum of the shortfall amount, it makes the whole
regulation of reasonableness of charges as per cost quite shallow.”