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At present, almost everyone has a bank account. Generally, there are two types of bank accounts — Current Account and Savings Account. Many people do not maintain the required minimum balance in their savings accounts. If someone fails to maintain this minimum balance, they are charged a penalty. To address this, the RBI has introduced new rules.

According to an RBI circular, no charges will be imposed for non-maintenance of minimum balance in inoperative accounts. Banks will not be allowed to levy minimum balance charges on accounts that have had no transactions for over two years. These rules will take effect from April 1.

RBI Minimum Balance New Rules : RBI’s Major Change on Minimum Balance

The Reserve Bank of India (RBI) has made a major change regarding the minimum balance requirement in bank accounts. If customers are not actively using their accounts, they will no longer have to pay minimum balance charges. RBI stated that banks cannot impose penalties for non-maintenance of minimum balance on accounts that have become inactive. This includes accounts with no transactions for more than two years.

Other Important Rules in RBI’s Circular

The RBI also clarified that accounts opened for receiving scholarships or direct benefit transfers (DBT) cannot be classified as inactive, even if there have been no transactions for more than two years.

The central bank issued this circular to guide banks, aiming to reduce unclaimed deposits in the banking system and help return such funds to their rightful owners.

How Banks Should Contact Customers

According to the new RBI rules, banks must inform customers through SMS, letter, or email if their accounts are about to become inactive. The circular also directs banks that if an inactive account holder does not respond, the bank should try to contact the person who introduced the account holder or their nominee.

No Charges for Reactivating Accounts

As per the new RBI circular, banks cannot charge any penalty for non-maintenance of minimum balance in inactive accounts. Furthermore, no charges can be levied for reactivating such accounts.
According to RBI’s latest report, unclaimed deposits increased by 28% as of March 2023, reaching ₹42,272 crore. Deposits in accounts that have not been operated for 10 years or more will be transferred to the Depositor Education and Awareness Fund (DEAF) maintained by the RBI.

Previously, RBI had instructed banks to ensure that penalty charges for non-maintenance of minimum balance do not make the account balance negative. However, many banks continued imposing such penalties despite these instructions.

How Banks Deduct Penalties

When an account has less than the required minimum balance, it may go into a negative balance. Once the customer deposits money again, the penalty amount is deducted first.
For example, if a penalty of ₹1,000 was imposed for not maintaining the minimum balance and you deposit ₹5,000 into your account, the bank will first deduct ₹1,000 as a penalty — leaving you with only ₹4,000 available balance.