LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

S B (Employee)     18 January 2011

AQB charges on dormant account coz of min AQB revision by ba

Subject: Service charge deduction towards not maintaining average quarterly balance (AQB) in a dormant account because of revision of the ACB limit by the bank

I have been sent a notice stating an amount of Rs. 827.25 has been debited as charges for not meeting AQB requirements by the bank.

Some inputs:

1. Savings Account is held since 2001 and the min AQB signed during opening was for Rs,5000 per quarter.

2. Account has been dormant. The bank has not issued the updated debit card NOR are any quarterly or annual statements sent for years now.

3. Suddenly, bank decides to increase AQB limit to 10,000rs from 1/4/2010.  This has not been communicated since I do not receive any statement from them on a periodic basis.


1. Is the revision of AQB applicable to Dormant accounts? If so, shouldnt it be formally communicated in a registered letter (not normal post) since this is a critical update to the terms and conditions esp. in case of a dormant account?

2.  If conditions are updated, shouldnt it be agreed by the customer? I have not signed for a 10K AQB with them.

3. If AQB is applicable from 1/4/2010, the service charge shouldve been deducted in July 2010 and a monthly/quarterly statement should have come from them since there is a change in the account balance. Shouldnt I be receiving updated statements?

4. How can they deduct charges on a dormant account when they are not giving any interest for a dormant account? Shouldnt it be a fair policy?

5. How can revisions in charges be applied to a dormant account like they have done here?

6. Can this be taken up with ombudsman / RBI as a unfair business practice by the bank?


Would like to hear the expert views on these questions and your recommendation on way forward.




 6 Replies

Isaac Gabriel (Advocate)     18 January 2011

At the time of opening account, an undertaking (printed format) is got signed by the account holder permitting to debit the account for reasons of administration ie for its convenience. For any doubts or clarifications this immunity is pointed out stating that it was done according to rules.Unilateral debits in accounts have become ythe order of the day in the banking sector,and the accounts holders are taken for ride even without any information. A public interest litigation alone could restrict these practices. The banking obbudsman normally accepts complaints, and the issue raised by you is liable for dismissal pointing out the signed undertaking.

KAMAL SONI (Banker)     18 January 2011


The desicision given by RBI on one such case will serve your purpose.


Case :

On scrutiny of complaints received against one of the banks it was observed that the complaints concerning levy of charges for not maintenance of AQB were on rise. It was more so in respect of special products, in which the accounts were up-graded from ordinary Savings Bank category without seeking clear mandate from the account holders.

It was observed that the bank was

sending certain communication to the customers seeking their approval for transformation of existing product to up-graded one along with a copy of response note to be signed by him. This note was seeking his confirmation on the bank’s intent. However, irrespective of receipt of any confirmation from the customer (presumably within prescribed period) the bank was inescapably implementing up-gradation formula and thereafter penalizing the customers for non compliance of terms and conditions of the up-graded product, including levy of charges for non maintenance of AQB. In our view bank’s such action was in violation of clause 4.d of BCSBI and hence needed remolding immediately. This aspect was unfolded through a complaint of such nature registered vide above referred number. In this regard it was observed that the bank had reversed charges levied to the complainant’s account only after his raising the issue before BO.

The bank in response to BO, had conveniently stated that the charges were reversed only as a service gesture. In our opinion, the bank had not done any favour to the customer in reversing the charges; it had simply corrected its wrongdoings. The more distressing factor in the matter was that the bank was resorting to this practice since long and hence there was scope to apprehend that the bank might have penalized many such accounts. The bank was advised to do away with such practices and ensure that the BCSBI codes accepted by the banks were religiously followed. Incidentally the bank’s attention was also invited to RBI circular dated February 22, 2007; the bank was advised to initiate action for elimination of complaints as outlined in the said circular...

1 Like

Kumar Doab (FIN)     18 January 2011


Learned membres ofthe forum have given their valuable advice.

As a matter of fair practice code bank should have given you the copy of all docs/forms on which they obtained your signatures including account opening form.In place of supplying the docs copy banks e.g HDFC bank tears off a small slip on which forn number is printed from the account opening form and handsover to customer, whereas many banks provide nothing.

You can claim and demand these from the bank without any prejudice to your rights, at their cost and demand it supply with a reasonable time say 15 days by registered post.Bank does not supply by registred post unless you create enough heat.

Banks have not been supplying the chjange/updation/adittion to the terms ands conditions and even do not display it in the bank properly or at all.

Without any prejudice to your rights you can issue a notice and ask for supply of all communications by registered post and claim it is mandatory for the bank to obtain your written acceptance, and that idf this fair and upfront demand is not found fit bank may state in writing that it is not WORKABLE  and hence rejected.

The rersponsibility of the bank is not posting only but to supply it to you under acknowledgment.Whereas bank disposes the responsibility by writing a line if not reported it shall be deemed to be delivered and accepted.Banl is not LORD AND MASTER TO CUSTOMER  by any rule or by any law.

After the takeover of Centurian Bank by HDFC bank the AQB was raised to Rs.10000/ without any digestable logic since the number of branches increased and bank got trained and less paid staff from CBOP and a good clientale.HDFC bank got more than double money at its disposable by raising AQB for other sources of revenues e.g lending.

Bank created and grabbed another opportunity of earning i.e accounts which did not maintain  AQB and due to signature on the account opening form withut obtaining any concurrence deducted the charges, and earned neat profit without any expense.While bank did not invest anythng on this.

As you can see happenning in the Bank, staff  rather forcible obtains email id and adds in the data to send cmmunicatins by email.The opening of email costs to customer while due to heavy usage gets it manyfolds cheap compared to the cost  to customer.

Bank adopted another tactics i.e mode of  desptach is bank's discretion.To a persisitent customer cutomer courier is sent.Each barnch is made to tie up with a small agent of courier at the lowest rates, and the cost of courier to bank less thasn that of even normal post.Bank now uses National bill mail service which is even more economical.To an even more persistent and irate customer bank shall send registred post.

It is upto you how much heat you can create.Branch managers are not afraid of litigations since litigations are looked after by anothr teams of thickly skinned employees.




The bank may relent and BM may reverse charges.

You may obtain the copies of all decisions of BO from their website,RBI rules ,and if possible all decisions of Consumer forum and frmae your complaints accordingly.If you find some useful decisions please post them on LCI forum, to benefit all.

The bigger ndustrialists business houses controle the bank and it has become the game of big bucks.

You shall have to shake not stir.


S B (Employee)     19 January 2011


I am trying get an answer for this particular question -

- Can a bank deduct AQB charges on a dormant account due to their revisioning of the limits?


S B (Employee)     06 February 2011

Update - went to the bank and asked about it. They immediately said that they would like to revoke the charges since I have not received any communication. Somehow it appears fishy. The in-charge person did not want to discuss any further saying your charges will be revoked.

Anyways, they have finally reverted back the charges for 2 quarters (which they had deducted) and I am happy.

Only  irritation - having to go across to the bank and making them understand the problem.  Botheration - how they cheat the gullible customers

Kumar Doab (FIN)     07 February 2011

Bank employees are supposed to wear their Id card on which  their employee number,designation,name  is also written.

Submit a written representation to the Branch Manager stating :

1.You are submitting this letter dated person.

2.On met in person (name and designation of the emplyee whom you has visited)for unauthorised/illegal debit of amount of Rs.........from your bank account number..............on dated ............without any lawful prior information and notice to you and without any prior  lawful acknowledgment and consent by you......and  on your representations your company maintained a studied silence............,

Mr.............pledged to you in person on dated .......during your in person reprresentation..that he has understood the whole matter and since bank is at fault..the debited  amount debited shall be credited to my account at once without any conditions.

3.Till date your hard earned monies illegaly debited  have not beed refunded  to you.

4.You had kept your hard earned monies in bank under goodfaith and that your faith is shaken and on top of that your company has done nothing to restore your faith.

5.You expect an action immediately and ask for account statement showing refund of the money without any cost to you.,under proper seal and signature of the competent bank employee.

6.If you wish you can raise a demand to compensate you for loss of business hours, money for makinf representations to company.

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Popular Discussion

view more »

Post a Suggestion for LCI Team
Post a Legal Query