Non-Usage Fees: What to Do When Your Bank Has Charged You for an Unused Current Account

Many individuals may find themselves in a situation where their bank has charged them for a current account that has been inactive for an extended period. This can be particularly disconcerting, especially if you had not been using the account for a long time. Here’s what you need to know about these charges and how you can approach your situation.

Explanation of Charges

When you open a bank account, whether it's a savings or current account, you typically agree to pay an Annual Maintenance Charge (AMC). These charges cover the operational costs associated with maintaining your account. Whether you use the account or not, these fees are non-negotiable and are a standard component of your agreement with the bank.

Simply because you have not used your current account for an extended period does not mean that these charges can be waived. You are still responsible for these fees as long as the account remains active. Once a certain period, usually around three years, passes and you haven’t conducted any transactions, your account may be marked as inoperative.

Steps to Take When Your Account Becomes Inoperative

If you find that your bank is charging you for an account that you haven’t used in a long time, it’s crucial to take the following steps:

Visit the Bank Branch in Person: The first step you should take is to visit your local bank branch. Here, you can discuss your situation and the charges in person. Many banks require you to make a transaction, like a deposit, to reactivate your account and make it operative again. This action not only activates your account but also resets any dormant status. Request Account Activation via Letter: If you are unable to visit the bank due to geographical or logistical reasons, you can write a letter to the bank. In the letter, request them to make your account operative. Banks generally respond positively to such requests, especially if you can provide a valid reason for your account’s inactivity. This might involve explaining your circumstances and any obstacles that prevented you from using the account. Pay the AMC Charges: If you decide to reactivate your account, you will need to pay the AMC charges that are due. Every bank has specific procedures for these payments, and you should contact your bank to understand their process. These charges are a part of the agreement you made when you opened the account, and you are legally obligated to pay them. Consider Negotiation: If you have a valid reason for not using the account and it would be difficult to pay the AMC charges, you can attempt to negotiate with the bank. Banks sometimes offer flexibility, especially if you can explain the circumstances that led to your inactivity. This can be your chance to have the charges waived or reduced based on your personal situation.

What to Do If You No Longer Need the Account

If, after careful consideration, you decide that you no longer need the account, there are a few options you can explore:

Do Not Hold Other Accounts with the Same Bank: If you have no other accounts with that particular bank, keeping the account inactive could result in continued charges. In this case, it might be more practical to leave the account dormant. Ask the Bank to Close the Account: You can also approach the bank and request them to close the account. If you inform the bank that you cannot pay the charges and have no intention of using the account, they may agree to close it. This process can vary from bank to bank and is best discussed directly with them.

It’s important to remember that while the decision to keep or close an account belongs to you, understanding the charges and your options is key to making a well-informed choice. By taking the appropriate steps, you can ensure that your accounts are managed in the best way possible, aligning with your financial goals and resources.

Conclusion

Banks charge Annual Maintenance Charges as a standard practice, and these fees are not subject to being waived simply because the account has gone unused for a long time. However, you do have options for addressing this situation. Whether you choose to reactivate the account, negotiate with the bank, or close it, understanding your rights and the procedures can help you make the most of your banking relationship.