Have you ever opened your bank app and seen something like –₹98.50 in your savings account?
That sinking feeling. That moment of confusion.
You’re not alone.
Whether it’s maintenance charges, auto-debits, or penalty deductions, a negative balance can feel like a silent trap — especially when the bank starts sending texts and calling you like you’ve committed financial fraud.
But let’s pause the panic for a moment and ask the real question:
What do the RBI guidelines for negative balance bank account actually say in 2025?
Can the bank charge you? Can they harass you for it? Can you go to jail?
In this guide, I’ll break it all down that is: clear, simple, and 100% useful.
What Is a Negative Balance in a Bank Account?
A negative balance means your bank account has gone below zero — you technically owe the bank money.
This is exactly the kind of situation covered under the RBI guidelines for negative balance bank account, especially when charges stack up without notice.
Let’s say you had ₹20 in your account. Then the bank deducts ₹75 as a minimum balance penalty.
Your account now shows: –₹55
Boom. You’re in negative territory.
Common Reasons for Negative Balances
- Auto-debits: Insurance, SIPs, loan EMIs
- Bank charges: Maintenance fees, SMS charges, ATM non-usage fees
- Inactive accounts: Charges stack up silently
Example:
You opened an account 1 year ago, never used it again.
Bank deducted ₹88 for non-maintenance. You didn’t notice.
Now your account is –₹88, and they’ve sent 3 emails and 5 SMSes.
Is It Legal for Banks to Allow a Negative Balance?
Short answer: Yes, but it must follow RBI rules.
Banks are allowed to deduct charges under their terms and conditions, but:
- They cannot convert your account into an overdraft without written consent.
- They must notify you of deductions clearly.
- They cannot keep charging interest on negative balances (RBI bans compounding for this).
RBI Guidelines for Negative Balance Bank Account [2025]
Let’s get straight to what the Reserve Bank of India actually says — because misinformation is the biggest enemy.
Key RBI Guidelines:
| Rule | What RBI Says | What It Means |
|---|---|---|
| Overdrafts require written consent | RBI Circular DBOD.Dir.BC.No.60/13.03.00/2014-15 | They can’t create a loan without your signature |
| Transparency in charges | RBI Circular RBI/2019-20/66 | All deductions must be shown clearly |
| No compounding of penalties | RBI Master Circular on Customer Service | Bank can’t charge interest on interest |
| Mandatory grievance redressal | RBI CMS Portal Guidelines | You can file a complaint if charged unfairly |
Reference: RBI CMS Portal
Can Banks Harass You Despite RBI Guidelines for Negative Balance Bank Account?
Let me be blunt:
NO, banks cannot harass, threaten, or send recovery agents over a small negative balance.
They can:
- Send polite reminders
- Ask you to settle the amount
They cannot:
- Call you at odd hours
- Send recovery agents
- File a police complaint
Most of these negative balances are under ₹500 — banks don’t chase people to court for such amounts.
Will It Affect Your CIBIL Score?
Nope.
Your CIBIL score is linked to:
- Credit cards
- Loans
- EMI-based products
A negative balance is NOT a loan. It won’t be reported to CIBIL — unless there’s a signed overdraft agreement involved.
So no — your credit score won’t take a hit just because your SBI account shows –₹98.40.
What If the Bank Keeps Calling?
If your ₹200 negative balance suddenly turns into mental harassment, here’s what to do:
Step 1: Check your passbook or bank statement
Know the source of the charge — don’t assume it’s your fault.
Step 2: Contact customer care
Politely ask for charge reversal. Many banks reverse penalties for senior citizens, students, or low-usage accounts.
Step 3: Email the bank’s grievance officer
You can find contact info on the bank’s official website.
Step 4: File a complaint on RBI CMS
Go to https://cms.rbi.org.in and file a digital complaint.
Step 5: If harassment continues, consult us
At Sharma Debt Solutions, we help borrowers file legal notices against harassment and misuse of rules.
When Does a Negative Balance Become Serious?
It’s rare, but in some cases, banks can escalate:
- If you signed up for an overdraft and ignored repayment
- If you withdrew cash using a debit card despite insufficient funds
- If the negative balance is over ₹5,000 and left unresolved for months
In those cases, it may be treated as overdraft abuse, and the bank can take legal action.
But for everyday users? This rarely happens.
Can You Go to Jail for a Negative Balance?
❌ No.
Negative balances are not criminal offenses.
You cannot be arrested.
You cannot be FIR’d.
You will not go to jail.
Anyone threatening you with jail is either:
- A fraudster
- A rogue collection agent (also illegal)
Can the Bank Close My Account?
✅ Yes — but only after 90 days of inactivity and no response.
Here’s the timeline:
- Day 1: Account turns negative
- Day 30–60: Reminders and SMS alerts
- Day 90+: Account may be frozen or closed
You may not be able to reopen an account with the same bank unless you clear dues.
What If You Ignore the Negative Balance Forever?
Here’s what will actually happen if you do nothing:
- Account will be closed after 90–180 days
- Bank may internally mark it as loss
- You won’t face any legal action unless fraud is involved
There is no court case and no CIBIL issue for a ₹75 penalty charge left unpaid.
But for peace of mind, it’s better to either:
- Pay it and close the account properly
- File a grievance and ask for reversal
Sharma Debt Solutions’ Advice (From Real Borrower Cases)
We’ve helped dozens of borrowers across India resolve negative balance disputes, especially when it turns into harassment.
Here’s our take:
✅ Do:
- Check your balance and transaction logs
- Raise a chargeback or reversal request
- Escalate to RBI CMS if ignored
- Keep records of all communication
❌ Don’t:
- Panic and pay blindly
- Respond to threats or illegal calls
- Give OTP or bank login to anyone claiming to “settle” it
FAQs – RBI Guidelines for Negative Balance Bank Account
Q1: Will a negative balance affect my CIBIL?
A: No, unless it’s a loan or overdraft.
Q2: Can the bank take legal action for ₹100 negative balance?
A: No, unless you signed an overdraft agreement and misused it.
Q3: Can I file a complaint against my bank?
A: Yes. As per RBI guidelines for negative balance bank account, you have the right to file a complaint using the RBI CMS portal if the charges are unfair or unexplained.
Q4: What if my account was inactive for 1 year?
A: Banks often waive charges on inactive accounts if you request politely.
Final Words: Don’t Fear, Get Informed.
Banks are supposed to follow rules. And RBI has made it clear — transparency, consent, and customer rights come first.
So the next time your balance dips below ₹0, don’t stress. Just follow the process laid out in the RBI guidelines for negative balance bank account and protect your rights confidently.
Need Help Right Now?
If you’re facing:
- Harassment from banks
- Auto-debit scams
- Legal threats over charges
We can help.
Phone Consultation
WhatsApp Paid Help: 9106484927
www.sharmadebtsolutions.in
