Imposition of Penalty Charges

• Banks impose non-maintenance charges if the balance falls below the required limit.
• These charges are usually levied monthly.
• The penalty amount depends on the shortfall in the required average balance.
• Charges may differ across urban, semi-urban, and rural branches.
• The fee is automatically deducted from the account.

Reduction in Banking Services

• Some services may be restricted temporarily by the bank.
• ATM usage, cheque book issuance, and debit card features may be limited.
• Internet and mobile banking functions may also be affected.
• Additional requests like passbook updates may attract extra fees.
• Upgraded account features may be revoked by the bank.

Risk of Account Downgrade or Closure

• The account may be downgraded to a basic or restricted type.
• Prolonged non-maintenance may lead to account freezing or closure.
• Banks issue warnings and reminders before taking such action.
• Interest credit may continue, but access to funds may be paused.
• Repeated violations may require re-verification of account status.

Impact on Credit and Reputation

• Frequent penalties can reflect poor financial discipline.
• May affect loan or overdraft eligibility in future.
• Negative internal bank records may influence service approvals.
• Lack of activity may lead to account being marked as dormant.
• Customers may face difficulties in availing linked financial products.

Ways to Prevent Penalty Deductions

• Regularly monitor balance through online or mobile banking.
• Set up alerts for balance status and minimum balance warnings.
• Schedule automatic deposits to maintain the required amount.
• Opt for zero balance or BSBD accounts if eligible.
• Contact the bank for balance-linked fee waivers or account adjustments.