The Reserve Bank of India had recently issued two important Circulars regarding the following :-
1) Levy of penal charges on non-maintenance of minimum balances in inoperative accounts.
2) Levy of foreclosure charges/pre-payment penalty on Floating Rate Term Loans.
As per the above circulars, the RBI has instructed the banks as follows :-
1) No charge shall be levied for non-operation/ activation of Basic Savings Bank Deposit Accounts. Hence there banks are not permitted to levy penal charges for non-maintenance of minimum balances in any inoperative account.
2) The banks will not be permitted to charge foreclosure/pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.
The relevant Notifications/Circulars are reproduced below :-