Central bank hikes minimum balance charges

Central Bank of India has increased charges on its minimum balance in the savings accounts. The minimum balance has to be maintained on a monthly basis as against the quarterly requirement that was currently in force for its customers. For a minimum balance of Rs 1,000 to Rs 2,000 in metros will attract up to Rs 50 if there is a shortfall of 75%. For a minimum balance of less than Rs 1,000, the penalty can go up to Rs 80 if the shortfall is more than 75% in the metro area. 

In the urban centres if there is a shortfall in the minimum balance of Rs 1,000 to Rs 2,000 then the fine can go up to Rs 35 if the shortfall is more than 75%. The new rates are effective October 1, 2019, the same day the bank will have to link the retail loans and micro small and medium enterprise loans to an external benchmark.

Earlier it was only the private banks that were imposing penalties for failing to maintain a minimum balance, but now all the public sector banks have started imposing penalties.

For a minimum balance of less than Rs 1,000 the penalties can go up to Rs 60 if there is a shortfall of 75% or more. In semi urban centres, shortfall in the minimum balance requirement of Rs 500 to Rs 1,000 can attract penalties of up to Rs 20 if there is a 75% of more shortfall. If the minimum balance falls below Rs 500 in semi-urban centres, then the penalty can be as high as Rs 40 for a 75% shortfall. 

In the rural branches of the bank the minimum balance requirements are Rs 250 to Rs 500. Here a if the minimum balance falls below 75%, then the charges are Rs 10, and if the minimum balance slips below Rs 250 then the penalty on the depositor is Rs 20 for a 75% shortfall. All the penalties will have additional GST and taxes on them.