It has been noted through receipt of increasing number of complaints from general public and representations received from different quarters that banks are demanding substantial amounts for opening of bank accounts and periodically deducting exorbitant sums from the depositors’ accounts on account of so-called “Service Charges” for maintaining less than the prescribed minimum balance in the accounts.  The phenomenon has been seriously undermining the promotion of banking culture in the society.

2.  With a view to promote healthy banking, it has been decided to substitute the existing Prudential Regulation No.XIII with the following: -

i)             All terms and conditions of operation of an account shall be duly made known to the opener of the account at the time of opening of the account.  The terms and conditions must be elaborately documented in the account opening form/application and must be signed by the prospective depositor/ account holder to signify having been read and understood.

ii)            All account opening forms shall be filled in by the account holder in duplicate, one copy of which shall be returned to the depositor/ account holder duly verified by the authorized officials of the branch under proper acknowledgement.

iii)         Terms and conditions of maintaining an investment account or other deposits for fixed periods, by whatever name called, shall be alterable only with the written consent of the depositor. In case the depositor does not consent to the proposed alterations, the bank shall have the right to close the account after giving 7-days notice to the depositor.

iv)          Effective immediately, non-remunerative deposit accounts and accounts opened on profit & loss-sharing basis shall not be subject to the levy of any service charges in any form what so ever.

v)           All sums maintained by the depositors with their banks on PLS basis, even if such balances have at any point of time fallen below the prescribed minimum, shall be remunerated as per the rates declared  by the banks. The banks can realize the penalty for violating prescribed minimum balance provided the depositor is duly notified and this condition is disclosed at the time of the opening of the account.

3                     The above instructions shall come into force with immediate effect.

4                     BPRD Circular No. 34 of 1995 in this regard has been withdrawn with immediate effect.

5.  Violation of the above instructions shall be subject to fine equivalent to not less than the sum deducted from the depositor’s account.

6.        Please acknowledge receipt.