IOB account closure fees

[maynigam]

Hey guys
I opened a current account 8 months back with Indian Overseas Bank, used it for a few months but then decided to open another current account in BoB and started using the new account.
I had been maintaining the minimum balance but was not using the IOB account. Last week I requested them to close my current account but they demanded 1000+GST as account closure fees and manager was unwilling to attempt a waiver.
This penalty seemed like a lot to me and I decided to empty the account. At present, the balance is zero

What are my options now? The bank is not ready to close the account without charges. Since I have removed all my money, they will start charging non maintenance charges and mark a lein on the account.
I am aware that RBI restricts any bank from making any customers account negative by charging non maintenance fees. I'm not sure if this is valid in case of current account.

Back Story: I needed a car loan and IOB had very high processing fees and they were not ready to accommodate other requests with respect to the loan. I got better rates and processing fees at BoB and the manager also urged me to open a current account in BoB. It seemed very logical to restrict most of my banking relationship with a single bank.

 

[VasukiVasuki is verified member.]

Iob account variant
Saving or current

Date of account opening
Mab ?

If less than 6-12 month
Few Banks charges / most of them

 

[maynigam]

Iob account variant
Saving or current

Date of account opening
Mab ?

If less than 6-12 month
Few Banks charges / most of them

IOB current account (basic variant).
Opened somewhere in August 24.
Current MAB 3200

Is there any way to avoid fees and close?
Any harm in keeping the account balance zero and letting it become negative and dormant?

 

[akiratoriyama]

Let the year finish in aug 2024 and close.

 

[maynigam]

But

Let the year finish in aug 2024 and close.

They are saying that charges will be applicable then as well

 

[rakeshsajjan45]

But

They are saying that charges will be applicable then as well

Please take the following actions:

1. Contact IOB Support: Send an email to IOB support requesting clarification on the debit amount. Specifically, ask them to provide documentation or a statement where this charge is explicitly mentioned.
2. Prevent Further Deposits: Ensure no funds are deposited into the account in question.
3. Remove Beneficiary Status: Remove this account as a beneficiary from all your other accounts. If you have shared this account for business purposes, inform the relevant parties to remove it and refrain from sending any further payments.
4. File an RBI Ombudsman Complaint: Lodge a complaint with the RBI Ombudsman, stating that IOB is charging account closure fees and, if applicable, that they indicated a negative balance would be applied.
5. Final Action (If Necessary): If IOB refuses to close the account after these steps, cease further action. When they contact you, reiterate your request to close the account."

 

[akiratoriyama]

Please take the following actions:

1. Contact IOB Support: Send an email to IOB support requesting clarification on the debit amount. Specifically, ask them to provide documentation or a statement where this charge is explicitly mentioned.
2. Prevent Further Deposits: Ensure no funds are deposited into the account in question.
3. Remove Beneficiary Status: Remove this account as a beneficiary from all your other accounts. If you have shared this account for business purposes, inform the relevant parties to remove it and refrain from sending any further payments.
4. File an RBI Ombudsman Complaint: Lodge a complaint with the RBI Ombudsman, stating that IOB is charging account closure fees and, if applicable, that they indicated a negative balance would be applied.
5. Final Action (If Necessary): If IOB refuses to close the account after these steps, cease further action. When they contact you, reiterate your request to close the account."

^ This. I can't find in any of the tncs of their website that they can charge this indefinitely. Get it written from them if possible.

 

[NABNAB is verified member.]

But

They are saying that charges will be applicable then as well

Yes, it's clearly written in the Services Charges List. So, you are obliged to pay the same.

The nonmaintenance of the MAB charges clause is probably not applicable to Current Accounts. Anyways, it can create issues later on.

So, either maintain the required balance OR pay the closing fees.

BTW, IOB is the best bank for receiving the Forex.

 

[maynigam]

I just want to get rid of that extra account. It's only a matter of 1000 but I don't want to be taken for a ride! They have my money for the past few months without paying any interest. Now they want me to pay account closure fees? Sound unfair to me!

 

[NABNAB is verified member.]

I just want to get rid of that extra account. It's only a matter of 1000 but I don't want to be taken for a ride! They have my money for the past few months without paying any interest. Now they want me to pay account closure fees? Sound unfair to me!

Current Accounts never earn interest; they are not meant for savings purposes. Banks give many more extra facilities required for the business/current account holders, which generally isn't available with a regular savings account.

The charges were already there when you opened the account with them. This is not something they hid and suddenly asked you. This is common for many banks.

I understand how it feels to pay fees where we haven't used any facilities, but think it like if you miss your train/flight/etc due to any reason, do they give any refund? No, right? It won't mean unfair, this is how it works.

 

[akiratoriyama]

Yes, it's clearly written in the Services Charges List. So, you are obliged to pay the same.

The nonmaintenance of the MAB charges clause is probably not applicable to Current Accounts. Anyways, it can create issues later on.

So, either maintain the required balance OR pay the closing fees.

BTW, IOB is the best bank for receiving the Forex.

Btw is this available exclusively in the branch? Their website doesn't have this in the service fee list or I couldn't find this when I checked.

 

[NABNAB is verified member.]

Btw is this available exclusively in the branch? Their website doesn't have this in the service fee list or I couldn't find this when I checked.

It's there on the website,

Here: https://www.iob.in/Service-charges

https://www.iob.in/upload/CEDocuments/iobRevision_of_Service_Charges_10062024.pdf

 

[akiratoriyama]

My bad. I think I saw another version of this docu which didn't have it. It's on page 30 @maynigam. Will have to pay it.

It's there on the website,

Here: https://www.iob.in/Service-charges

https://www.iob.in/upload/CEDocuments/iobRevision_of_Service_Charges_10062024.pdf

 

[maynigam]

It's there on the website,

Here: https://www.iob.in/Service-charges

https://www.iob.in/upload/CEDocuments/iobRevision_of_Service_Charges_10062024.pdf

Yes. They sent me a copy of it. What happens if I make the account balance zero and forget about it. How does it affect me?

 

[NABNAB is verified member.]

Yes. They sent me a copy of it. What happens if I make the account balance zero and forget about it. How does it affect me?

They will continue to levy debit card, penalties, nonmaintenance charges as it's a current account and eventually mark it as dormant with a huge negative balance.

There will be some IDs, like PAN, Aadhar, etc, might be attached to this account.

May not affect as of now. But in the future, it may affect in many ways. i.e., There are rules about having a specific no of current accounts only, etc.
Some other banks/institutions may ask for the NOC for this account, they may report this to CIBIL or any other such institutions if required.

At that time, this closure will be more costly than it is now.

Note: RBI's rule of negative balance isn't applicable for the current accounts AFAIK.

 

[zomatoo]

Yes. They sent me a copy of it. What happens if I make the account balance zero and forget about it. How does it affect me?

They'll cut mab charges every month but the account will always remain zero

 

[akiratoriyama]

They will continue to levy debit card, penalties, nonmaintenance charges as it's a current account and eventually mark it as dormant with a huge negative balance.

There will be some IDs, like PAN, Aadhar, etc, might be attached to this account.

May not affect as of now. But in the future, it may affect in many ways. i.e., There are rules about having a specific no of current accounts only, etc.
Some other banks/institutions may ask for the NOC for this account, they may report this to CIBIL or any other such institutions if required.

At that time, this closure will be more costly than it is now.

Note: RBI's rule of negative balance isn't applicable for the current accounts AFAIK.

Yes it isn't applicable for current account. If you try to close in the future they'll have you settle the balance. Better take the 1k loss and move on. Or can keep this account if getting inward remittances.