Bharatiya Mahila Bank sets foot in Bhubaneswar

It was turn of Bhubaneswar to welcome BMB into its fold. In the first week of June 2014, the first branch in Odisha was inaugurated in Bhubaneswar. A galaxy of women achievers graced the occasion.

The inauguration was done by Dr.Pratibha Satpathy.

The branch is located at: 778, Maharishi College Road, Sahid Nagar, Bhubaneshwar-751007

The Sahid Nagar layout was planned in the late 60’s as an upscale residential area. Over the decades the face of Sahid Nagar has changed from a residential to a commercial area.

Indian inoperative bank accounts not eligible for Penal Charges

One of the conditions a customer signs while opening a bank account is acceptance of penal charges in case minimum balance is not maintained as per the Terms and Conditions of the respective Saving/Current Bank product.

This clause of levying penal charges was applicable to inoperative accounts too.

Q: What are inoperative accounts in the Indian banking context?

Ans: A savings as well as current account should be treated as inoperative / dormant if there are no transactions in the account for over a period of two years.

a)    For the purpose of classifying an account as ‘inoperative’ both the type of transactions i.e., debit as well as credit transactions induced at the instance of customers as well as third party should be considered. However, the service charges levied by the bank or interest credited by the bank should not be considered.

b)   There may be instances where the customer has given a mandate for crediting the interest on Fixed Deposit account to the Savings Bank account and there are no other operations in the Savings Bank account. Since the interest on Fixed Deposit account is credited to the Savings Bank accounts as per the mandate of the customer, the same should be treated as a customer induced transaction. As such, the account should be treated as operative account as long as the interest on Fixed Deposit account is credited to the Savings Bank account. The Savings Bank account can be treated as inoperative account only after two years from the date of the last credit entry of the interest on Fixed Deposit account.

c)    Operation in such accounts may be allowed after due diligence as per risk category of the customer. Due diligence would mean ensuring genuineness of the transaction, verification of the signature and identity etc. However, it has to be ensured that the customer is not inconvenienced as a result of extra care taken by the bank.

d)   Banks should charge any fees for activation of inoperative account.

e)    Interest on savings bank accounts should be credited on regular basis whether the account is operative or not. If a Fixed Deposit Receipt matures and proceeds are unpaid, the amount left unclaimed with the bank will attract savings bank rate of interest.

 

Reserve Bank of India, vide Notification No: RBI/2013-14/580 DBOD. Dir.BC.No. 109 /13.03.00/2013-14 Dt.May 6, 2014, clarified on levying penal charges on non-maintenance of minimum balances in inoperative Accounts

The reference point is Part B of the First Bi-monthly Monetary Policy Statement 2014-15 announced on April 1, 2014, proposing certain measures towards consumer protection such as non-levy of penal charges for non-maintenance of minimum balance in any inoperative accounts.

The other RBI circulars referred here are :

01)Circular DBOD. Dir. BC. 53/ 13.10.00/ 2002-03 dated December 26, 2002 on ‘Minimum Balance in Savings Bank Accounts’ advising banks to inform customers regarding the requirement of minimum balance in savings bank account and levy of penal charges for non-maintenance of the same at the time of opening the account in a transparent manner.

02)Terms of para 3 of our Circular DBOD. No. Leg. BC.35/09.07.005/2012-13 dated August 10, 2012 on ‘Financial Inclusion- Access to Banking Services – Basic Savings Bank Deposit Accounts’ it was advised to banks that no charge should be levied for non-operation/activation of Basic Savings Bank Deposit Accounts (BSBDAs).

 

Hence, Reserve Bank of India has advised banks henceforth not to levy penal charges for non-maintenance of minimum balances in any inoperative account.

“Instead of levying penal charges for non-maintenance of minimum balance in ordinary savings bank accounts, banks should limit services available on such accounts to those available to basic savings bank deposit accounts and restore the services when the balances improve to the minimum required level,”

Bharatiya Mahila Bank opens branch in Goa(14th Branch) and Jaipur(15th Branch)

The current target of Bharatiya Mahila Bank  is to open branches in all the Indian states by the end of this financial year.

No, as Seemandhra and Telangana have yet to formed, it will have a presence in only Andhra Pradesh.

The target for 2014-15 is to open 55 more branches in Tier 4, Tier-5 and Tier-6 cities in 2014-15.

BMB’s 14^th Branch was inaugurated in Jaipur and Goa will have the honors of BMB’s 15^th Branch.

In Goa, the Banks CMD said, the bank would take advantage of the existence of Common Civil Code by virtue of which women got equal ownership of immovable and other property along with their spouses.

In other parts of the country, bankers faced this problem while financing as women did not have ownership of houses, immovable properties, she lamented.

New RBI guidelines on Resident Bank account maintained by residents in India – Joint holder – liberalization

 

Reserve Bank of India vide Notification No RBI/2013-2014/437 A.P. (DIR Series) Circular No. 87 dt.January 9, 2014, has allowed Indian resident relatives to become Joint Account Holders with Non-Resident Indians.

The highlights of the Notification are:

• Such an account will be treated as resident bank account for all purposes and all regulations applicable to a domestic account will be applicable.
• The joint account holder facility will be extended to all types of resident accounts, including savings bank account.
• Cheques, instruments, remittances, cash, card or any other proceeds belonging to the NRI close relative shall not be eligible for credit to this account. There will be major challenges in terms of Electronic Payments. In Electronic Payments viz NEFT/RTGS etc, only the Account Number is validated in the first phase of verification.
• The NRI close relative shall operate such account only for and on behalf of the resident for domestic payment and not for creating any beneficial interest for himself.
• Where the NRI close relative becomes a joint holder with more than one resident in such account, such NRI close relative should be the close relative of all the resident bank account holders.
• Where due to any eventuality, the non-resident account holder becomes the survivor of such an account, it shall be categorized as Non-Resident Ordinary Rupee (NRO) account as per the extant regulations.
• Yes, the onus will be on the non-resident account holder to keep AD bank informed to get the account categorized as NRO account and all such regulations as applicable to NRO account shall be applicable. This will be a major relief to AD Banks.
• An explanation for actual need for such a facility and a declaration duly signed by the non-resident account holder must be provided to the bank.

Background: In terms of  A.P.(DIR Series) Circular No.12 dated September 15, 2011 individuals resident in India were permitted to include non-resident close relative(s) (relatives as defined in Section 6 of the Companies Act, 1956) as a joint holder(s) in their resident savings bank accounts on “former or survivor” basis. Such non-resident Indian close relatives were not eligible to operate the account during the life time of the resident account holder in terms of said instructions.

Reserve Bank has received representations that for operational convenience the Non-Resident Indians (NRIs), as defined in Regulation 2(vi) of FEMA Notification No.5 dated May 3, 2000, may be permitted to operate such accounts on “Either or Survivor” basis. Accordingly, on a review, it has been decided that AD banks may include an NRI close relative (relatives as defined in Section 6 of the Companies Act, 1956) in existing / new resident bank accounts as joint holder with the resident account holder on “Either or Survivor” basis.