If you are stuck in such a situation, here is what to do.

Mr. Alok Sharma held two accounts with Dakshin Bharat Bank and one with Pioneer National Bank. One of his accounts at Dakshin Bharat Bank had been inactive for over four years. Recently, a friend, Mr. Vikram Singh, transferred ₹10,000 into this dormant account. To Mr. Sharma’s shock, the bank immediately debited ₹9,200 from the account. Upon inquiry, the bank stated that the deduction was for accumulated charges due to non-maintenance of the minimum average balance over the years. Feeling helpless, Mr. Sharma sought advice on how to recover his money, as the deduction seemed disproportionate and unfair.

Advice in such cases

When a bank makes such a large deduction, it can be distressing. However, there are specific steps you can take to challenge the deduction and seek a resolution.

• Review Terms and Conditions: The first step is to carefully review the terms and conditions agreement you signed when opening the account. Banks are required to disclose all charges, including those for non-maintenance of minimum balance.
• Communicate with the Bank: Initiate a formal written communication with the bank’s branch manager. Clearly state your issue, provide account details, and request a detailed breakdown of the charges levied. Ask them to cite the specific rule or RBI guideline that permits such a deduction from a fresh credit into a dormant account.
• Escalate to the Nodal Officer: If the branch does not provide a satisfactory response within a reasonable time, escalate the complaint to the bank’s designated Nodal Officer for grievance redressal. The contact details are usually available on the bank’s official website.
• Approach the Banking Ombudsman: If you do not receive a reply from the bank within 30 days or if you are not satisfied with their response, you can file a complaint with the Reserve Bank of India’s Banking Ombudsman. This is a free service for resolving customer complaints against banks.
• Consumer Court: As a last resort, you can file a complaint for “deficiency in service” under the Consumer Protection Act, 2019, in the appropriate consumer disputes redressal forum.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think

Applicable Sections of Law

This situation is primarily governed by banking regulations and consumer protection laws rather than criminal statutes like the Bharatiya Nyaya Sanhita (BNS).

• Reserve Bank of India (RBI) Guidelines: The RBI has issued numerous circulars and master directions on customer service, including guidelines on dormant accounts and fair practices for levying charges. RBI mandates that charges must be reasonable and explicitly communicated to customers. Penalties on dormant accounts cannot be so high as to turn the balance negative.
• Banking Regulation Act, 1949: This Act provides the overall legal framework for banking in India and empowers the RBI to issue directives to banks in the interest of the public and depositors.
• Consumer Protection Act, 2019: Levying exorbitant or unfair charges without proper prior notification can be considered a “deficiency in service” or an “unfair trade practice” under this Act. This allows you to seek redressal through consumer courts.
• Indian Contract Act, 1872: The relationship between a banker and a customer is contractual. The terms and conditions of the account form this contract. Any action by the bank that violates these terms can be challenged.

If you are the complainant

As the person whose money has been deducted, you are the complainant. You need to act systematically to build your case.

• Organize Documentation: Collect all relevant documents, including bank statements showing the credit and subsequent debit, a copy of your passbook, and any previous communication from the bank regarding your account status or charges.
• Draft a Formal Complaint: Write a clear and concise complaint letter. Address it to the Branch Manager first. Mention your account number, the transaction details, the amount deducted, and why you believe it is unfair. Request a full refund. Keep a copy of this letter and proof of its delivery.
• Follow the Escalation Matrix: If the branch doesn’t resolve the issue, follow the bank’s official grievance redressal hierarchy—from the Branch Manager to the Nodal Officer, and then to the Principal Nodal Officer.
• Lodge an Ombudsman Complaint: If the bank fails to resolve your issue within 30 days, file a complaint online on the RBI’s Complaint Management System (CMS) portal for the Banking Ombudsman.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think

If you are the victim

Realizing a large sum has been taken from your account can be shocking. It is important to stay calm and act methodically.

• Act Immediately: Do not delay. The sooner you report the issue, the better. Visit the bank branch in person and also send a written complaint via email to create a digital trail.
• Document Every Interaction: Keep a log of every phone call, visit, and email. Note down the name of the bank official you spoke to, the date, time, and the summary of the conversation.
• Do Not Accept Verbal Assurances: While a bank official might verbally assure you of a resolution, always insist on a written acknowledgment of your complaint and a timeline for its resolution.
• Check RBI Guidelines: Familiarize yourself with RBI’s guidelines on dormant accounts. RBI has stated that banks should not levy penal charges for non-maintenance of minimum balance in any inoperative account. This knowledge will empower you during discussions.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think

How the police behave in such cases

This is a crucial point to understand. The police will not intervene in such matters. This is a civil dispute between a customer and a bank, not a criminal offence like theft or fraud. If you approach a police station, they will correctly advise you that this is a banking matter and direct you to approach the bank’s grievance redressal mechanism or the Banking Ombudsman. They will not register an FIR (First Information Report) as there is no cognizable criminal offence involved.

FAQs people normally have

Here are some common questions that arise in such situations:

• Can a bank legally deduct charges for non-maintenance of balance from a dormant account?
  While banks can levy charges as per their terms, RBI guidelines stipulate that for inoperative or dormant accounts, these charges must be reasonable. Furthermore, RBI has directed banks not to levy penalties for non-maintenance of minimum balance in such accounts. Activating an account with a fresh credit should ideally not trigger past penalties in this manner.
• Is there a limit to how much a bank can charge?
  Yes, the charges must be reasonable and proportional. They cannot be exorbitant. The charges should be as per the schedule of charges that was applicable and communicated to the customer during the period of non-maintenance.
• What is the role of the Banking Ombudsman?
  The Banking Ombudsman is a senior official appointed by the RBI to redress customer complaints against banks for deficiency in certain banking services. It is an independent body that provides a swift and inexpensive forum for resolution.

What evidence is required?

To build a strong case, you will need the following evidence:

• Account Statements: The complete statement of the account, especially showing the recent credit and the immediate debit of charges.
• Passbook: A copy of the updated passbook.
• Proof of Complaint: Copies of all letters, emails, and online complaint forms submitted to the bank and other authorities. Include postal receipts or delivery confirmations.
• Bank’s Terms and Conditions: If you have a copy of the T&C booklet or can find it on the bank’s website from the time you opened the account, it would be very helpful.
• Identification Documents: A copy of your ID and address proof as linked with the bank account.

How long will the investigation take?

The timeline for resolution can vary:

• Bank’s Internal Redressal: Banks are mandated to resolve complaints within 30 days.
• Banking Ombudsman: The process at the Ombudsman’s office can take anywhere from a few weeks to a couple of months, depending on the complexity of the case and the bank’s response.
• Consumer Court: A case in the consumer court can be a longer process, potentially taking several months to over a year for a final decision.

Advocate Sudhir Rao, Supreme Court of India