When customers fail to maintain the minimum required balance, most banks deduct the penalty from money coming into the account. Understandably this leaves customers unhappy and raises several ethical questions. For example, recently, an Indian coir worker’s government sanctioned welfare pension was taken by the bank as their fall below balance fee, leaving the customer with a tiny fraction of the money.
For people surviving off their welfare pay-outs, this is a significant concern and raises a bigger question of the banking sector’s social responsibility. Regulatory bodies have stepped in to make the process more transparent and less of a burden for account holders. From mandatory communication to exempting certain welfare accounts from fall below balance fees, there are several regulations in place to protect the interests of customers. And banks are finetuning their strategies to ensure minimum inconvenience. Some banks like Mashreq and HDFC are offering waivers based on length and value of the relationship. Others like Kotak Mahindra Bank and IDFC are tightening their communication strategies and deferring the penalty timeframe to give customers the time to make up the gap.
