Consumers will end up paying more for ‘other services’ if penalty for non-maintenance of minimum balance in savings bank accounts is done away with, according to Aditya Puri, MD and CEO of HDFC Bank.

The RBI on Tuesday said banks should not levy penal charges for non-maintenance of minimum balance in ordinary savings bank accounts and inoperative accounts. Instead, they should curtail the services accorded to those accounts until the balance is restored.

Though bankers agreed that the direction is good, Puri said bank customers will end up shelling out more. “If you have consumer interest in mind, you will not push for this (RBI measure), because you will be otherwise charged for those other services,” Puri told newspersons in a post-policy conference with bankers.

Assuming that the bank earns ₹400 on a balance of ₹10,000, Puri said the bank provides services such as bank statements, cheque books for a year, ATM transactions, and so on, for that amount. However, if that is not charged, consumers will have to pay for those services, which will end up being much more than the penalty for non-maintenance of minimum balance.

Puri said, “₹400 is less than what your tea costs you for a month.

“If we don’t charge for minimum balance, we are authorised to charge for other transactions…The fact of the matter is that banks will also want to make profits.”

The HDFC Bank chief added that to break-even banks need a minimum balance of ₹25,000-30,000.

Currently, customers of State Bank of India, among others, do not pay for non-maintenance of minimum balance or pre-payment penalty. However, banks can charge on transactions, following the latest move by the apex bank.

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