Banking: Prashant Joshi

A few months ago, I opened a savings account with a public sector bank for my son. My purpose was that the money awarded to him for clearing a scholarship exam could be deposited in it. Recently, the bank debited Rs 160 from the account, saying it had been inoperative for six months. But according to the bank’s website, there were no charges for an inoperative account for a year. Is the bank correct in debiting the charges? If not, what action can I take and how?
According to the guidelines of the Reserve Bank of India (RBI), an account is classified as inoperative or dormant if there are no customer-induced transactions for over 24 months. The activation of a dormant account, which is done on request by the customer and which also requires submitting a few documents, is free of any charge, according to the RBI guidelines. You can forward your case to the customer grievance redressal officer of the bank. You may also approach the banking ombudsman if you do not get due redressal from the bank within one month.

 

What is a sweep-in account? Is it an advisable option, and why?
A sweep-in account is a combination of a savings account and a fixed deposit, which enables customers to earn a higher interest rate on idle balance in the savings account. Any excess balance in the savings account (which can be defined by customers) can get swept in to the fixed deposit, so that customers can earn a higher interest rate on these funds vis-a-vis the savings account.

Some sweep-in accounts also have a sweep-out option, whereby if the funds in the savings account are insufficient to honour a cheque, or if the customer wishes to withdraw cash from the account, the required funds will be transferred from the fixed deposit and credited in the savings account. This is a product whereby customers can earn higher returns without sacrificing liquidity, depending on the rate of interest offered by the bank on fixed deposits and the tenure.

My credit card is linked to my salary account and I have chosen the auto debit option for bill payment. Unfortunately, I did not get my salary on time last month. And, due to insufficient balance in the account, the auto debit option failed to process the payment. I was intimated by the bank, but since I share a good rapport with my bank, I was told the penalty would be waived. However, I noticed that the charges were not reversed. My bank refuses to acknowledge that it had agreed to waive the penalty and accept a late payment, as our communication was oral. What should I do?
You can approach the nodal officer of the bank through an email or a letter or by calling up the bank’s helpline. Since you hold the salary account in the same bank and maintain a clean payment track record, the bank may consider waiving the penalty charges as a service gesture. It is always in your interest to maintain sufficient balance to avoid late payment charges, as a default in payment, particularly loan repayment, can affect your credit score in the credit bureau.

The writer is managing director and head, private & business clients (India), Deutsche Bank. Send your queries to yourmoney@bsmail.in