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pranab majumdar (Senior Executive)     08 June 2012

Closed account

a salary account of an mnc employee closed by bank itself for unreasonable reason.the company has to pay

his salary by another bank account.Any money transaction to the said account by anybody is illegal.Bank has

no right to correspond with the individual.


 3 Replies

Prasun Chandra Das (Banker)     09 June 2012

what is the query?

1 Like

Prasun Chandra Das (Banker)     15 June 2012

I have read your PM to me but I still do not understand what the query is. The reason for replying publicly to your PM is that I would like to share what I know about salary a/cs with all visitors to this topic.


Banks generally offer salary a/c facility to Corporates meeting certain criterion (A no.of employees and an average salary of B per month) with the primary goal of cross sell opportunities. Banks get (1) X no.of a/cs and so Y amount of low cost  float balance, (2) Z no.of employees to whom so many products - like investment, life insurance, lockers, gold, credit cards, retails loans - can be sold. The bank has huge database and just contacts the Co's HR dept and puts up a stall at the main entrance gate, and lot of business flows in with minimum effort. The most common benefits of salary a./c holders are (1)  zero balance savings a/c, (2) DD/PO free (maybe upto a limlit per day/month), (3) ATM Debit card free/less rate, (4) Nil/Less processing fee and lower interest on Retail loans (like car/personal/home loan), (4) credit cards. However, there is a catch - if salary is not credited for consecutive 3 months to the a/c, the savings a/c is treated as a normal savings a/c, and all special benefits are withdrawn (it is very rare if the a/c is closed). This is a common catch for most banks. 


Coming back to your post:

"a salary account of an mnc employee closed by bank itself for unreasonable reason."----- do you mean unreasonable reason or no reason? Banks generally do not unilaterally close business - the reason can be ascertained by speaking to the bank.

"the company has to pay his salary by another bank account."------ what is the problem in this? If the bank which closed the a/c is where the person wants to keep an a/c, then he must ascertain why the a/c was closed and insist with his HR dept to take steps so that a new a/c is opened again in the same bank.

"Any money transaction to the said account by anybody is illegal"------------- all transactions that can be done in a normal savings a/c, can be done in a salary a/c. Some banks/employees caution/advise salary a/c holders not to deposit large sums in cash because their a/c statements might be scrutinised by income tax dept. I have done it myself, but the banks cannot forcibly stop someone from doing so. At best the banker can make enqueries if the transaction does not justify the a/c holder's profile and/or is of  suspicious nature.

"Bank has no right to correspond with the individual."------ bank can correspond with the salary a/c holder as it wishes. It is not required to route correspondence through the Co. HR/Admin dept (unless there is a specific instruction from the do so).

Hopefully this answers what you were looking for.

1 Like

Kumar Doab (FIN)     17 June 2012

Kindly check if the bank has created a lien.You can speak to BM of the bank and obtain a/c statement, and ask for the letter citing reasons.Bank is under obligation to supply it.

1 Like

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