HSBC Bank ignores RBI norms, has different rules for first holder and second holder in a joint account
Moneylife Digital Team 04 August 2011

The UK-based bank says the zero-balance facility applies only to the original account holder, but not to the second person when the individual account is converted into a joint account

If you have a zero-balance salary account with a foreign bank and want to convert it into a joint account with your spouse, you might want to think again before you do it. The joint account-holders will have to maintain a minimum balance in the account, as far as HSBC Bank is concerned.

Pune-based professor Anil Agashe and his wife discovered this strange bank norm when they applied to convert Mrs Agashe's salary account at HSBC Bank's Law College branch, into a joint account, in 2004. Mrs Agashe is an advisor at Max New York Life and her commission payments were regularly credited to her account, which was a zero-balance account that she opened in 2002.

When the Agashes approached HSBC Bank, the account was converted into a joint account, and no questions were asked. But subsequently, the bank also upgraded the account to a category that requires a minimum balance of Rs3 lakh, without asking either of the account holders.

When the Agashes discovered this 'upgrade' later, they complained to the bank and managed to convert it to a 'normal' savings account. But the minimum balance required in this case was Rs75,000-and the couple was required to submit an application! The zero-balance facility did not apply for this account. "My argument is, if we had not applied for an upgrade, why should we apply for the downgrade (to Rs75,000)?" asks Mr Agashe.

Again, Mr Agashe informed the bank that the account was originally a zero-balance account. Only then did HSBC inform the account holders that the zero-balance facility was available to the first account holder and the joint account now required a minimum balance of Rs75,000.

Talking to Moneylife, Professor Agashe expressed his surprise saying, "How can you have two different rules for one account? If they (the bank) knew it was a salary account, why did they change it to a joint account in the first place?"

"I even asked them to make my wife the authorised signatory and give her all the rights to operate the account, with my name added on (as a nominee), but no (signing) authority for me. But the bank didn't listen," says Mr Agashe.

The Agashes met the bank's officer to enquire about the Reserve Bank of India (RBI) guidelines on this issue. "When I told the officer that the RBI does not make such a distinction, he said that HSBC has its own rules! I even told him that his (HSBC Bank's) rules could not be at variance with RBI guidelines. The officer insisted that 'HSBC is a foreign bank and therefore we can make our own rules irrespective of what the RBI says'," said Mr Agashe.

When Moneylife contacted HSBC Bank, the spokesperson refused to comment, saying, "We don't comment on client's account details due to security reasons, and we will answer the queries of the concerned account holder."

Comments
Rajnish Surve
3 years ago
Nobody in the world dared to punished hsbc.
Ravi
1 decade ago
Hi Money LIfe team,

Every bank, barring the PSU banks, have a higher minimum balance rule, and other onerous conditions. The case example may be unusual but if it does not violate any RBI guidelines (and you should be able to state it if this is indeed the case), I don't see this is a big issue.

Ravi
Prakash
1 decade ago
Hi,

I have had somewhat similar experience with Axis Bank's Priority Account. A written request was submitted in 2009 to the bank to change the address for joint account with my wife. This year both of our debit cards expired. I received my debit card and PIN BUT my wife's debit card and PIN were not received. On inquiring with the branch I was told that it had returned to them by the courier. They had sent my wife's debit card and pin on my old address. When I questioned this, they said that you never submitted Change of Address for the Joint Holder. It was a ridiculous answer and explanation.
Ravi
Replied to Prakash comment 1 decade ago
Address is a critical piece of informatin and any updates should be done independently for the joint account holders. A lot of fraud occurs due to wrong address or wrong email id.

Was the update done?
Prakash
Replied to Ravi comment 1 decade ago
If you are indeed from Axis Bank, let me mention another so called feature of Axis Bank's Priority Account. It entices customers by promising invitations to entertainment events per year, but I have not been invited for a full year. Then when I complained I was invited once and then again there has been no invitation since almost over a year. Another false promise to gift a "Diary" exclusively for Priority Account holders. I HAVE NOT RECEIVED IT FOR 2011 AND IT'S AUGUST. Not only that, but it's Import Division is in perpetual habit of loosing submitted documents and then demanding the copies from customers with threatning letters. I think it would not be a bad idea to pull up the bank for these wrong doings.
Prakash
Replied to Ravi comment 1 decade ago
You quite obviously seem to be from Axis Bank. The letter clearly stated that the address change was for THE ACCOUNT AND NOT JUST FOR THE FIRST HOLDER. I have been verbally assured by the RM that the updation is done, but I doubt very much.
Ravi
Replied to Prakash comment 1 decade ago
You guess wrong.

I am also a Priority customer and recently became a joint a/c holder which was a single a/c held by my wife. I had to provide address proof.

I suggest you work with the RM or change your bank. Don't expect real service from these banks. The RM's don't know much about banking and you need to follow up directly
Prakash
Replied to Ravi comment 1 decade ago
From your advice of 'change your bank', if I am not mistaken, you got to be 'RS'. Anyways.. I do not think your suggestion or solution of changing the bank is correct or practical, because at that rate there will be no bank left to bank with. You yourself say not to expect real service from these banks. In which case how many times one will keep changing the bank. And I am sure what humongous work is involved in changing one's bank. If everyone starts changing the bank as a solution to bad service, then you do not need an 'ombudsman'. It is necessary to fight for your rights and not runaway. But you are absolutely right about RMs. They are no good. I also am customer with other pvt. bank and I have to do continuous follow up on RM to get my work done. And imagine RMs were put in place to take over that burden from the customer.
Ravi
Replied to Prakash comment 1 decade ago
You are mistaken, again. Not sure who is RS.

If you are the customer, you can indicate displeasure by leaving or take it up with the bank. That is practical.

Up to you. SBI is very good. Any bank has a range of services and costs involved. If you want good service, then search for it.

Not getting your diary is a trivial issue. Not getting your debit card is major - fight the right issue

Enough on this topic. Good day.
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