Can banks put your account balance in minus? Know what the rules say

Has it ever happened that there is less money left in your savings account and the bank has made your balance negative by charging a fee on it. Can banks do this? Recently Yes Bank had to pay a fine of Rs 91 lakh for doing this. Know what the rule says...

It is often seen that if the balance in someone's savings account is low, then the bank charges on it and makes the account balance negative. Is it right to do this? What do RBI rules say about this? Recently, when Yes Bank made people's account balances negative, why did it have to pay a fine of Rs 91 lakh? You will get the complete details here.

According to RBI guidelines, if the minimum balance is not maintained in your account, then the bank cannot put your account balance in minus. Recently, the Reserve Bank of India (RBI) has imposed a fine of Rs 91 lakh on Yes Bank for not following the rules related to this. What are the complete rules regarding this?

Banks cannot levy wrong charges for not maintaining minimum balance in savings accounts. On this, Punjab and Haryana High Court lawyer Preeti Singla said that RBI had issued guidelines regarding this in 2014 itself. It was said that the bank cannot put the account in minus for not maintaining minimum balance in savings accounts.

These are the rules of RBI

According to RBI's 2014 circular, if the minimum balance requirement is not being met, then banks have to inform the customers immediately. If the minimum balance is not maintained in savings accounts, then banks have to inform their customers about the fine imposed on it. Also, it has to be ensured that if the minimum balance is not maintained, then the money in the savings account can be deducted only till the balance in the bank becomes zero, it cannot be converted into a minus balance.

Instead of imposing a fine for not maintaining the minimum balance, banks can stop the services available on such accounts. When the balance is restored, the services can be restored. Also, if someone wants to close his bank account, then the banks will have to close it absolutely free of cost. That is, the banks cannot charge you anything for this.

Option to create a basic account

Banks have another option. They can convert such accounts into basic savings accounts after taking consent from the customers. In this, people's savings accounts remain operational with some minor facilities at zero balance.