Closed account

what is the query?

I have read your PM to me but I still do not understand what the query is. The reason for replying publicly to your PM is that I would like to share what I know about salary a/cs with all visitors to this topic.

Banks generally offer salary a/c facility to Corporates meeting certain criterion (A no.of employees and an average salary of B per month) with the primary goal of cross sell opportunities. Banks get (1) X no.of a/cs and so Y amount of low cost  float balance, (2) Z no.of employees to whom so many products - like investment, life insurance, lockers, gold, credit cards, retails loans - can be sold. The bank has huge database and just contacts the Co's HR dept and puts up a stall at the main entrance gate, and lot of business flows in with minimum effort. The most common benefits of salary a./c holders are (1)  zero balance savings a/c, (2) DD/PO free (maybe upto a limlit per day/month), (3) ATM Debit card free/less rate, (4) Nil/Less processing fee and lower interest on Retail loans (like car/personal/home loan), (4) credit cards. However, there is a catch - if salary is not credited for consecutive 3 months to the a/c, the savings a/c is treated as a normal savings a/c, and all special benefits are withdrawn (it is very rare if the a/c is closed). This is a common catch for most banks. 

Coming back to your post:

"a salary account of an mnc employee closed by bank itself for unreasonable reason."----- do you mean unreasonable reason or no reason? Banks generally do not unilaterally close business - the reason can be ascertained by speaking to the bank.

"the company has to pay his salary by another bank account."------ what is the problem in this? If the bank which closed the a/c is where the person wants to keep an a/c, then he must ascertain why the a/c was closed and insist with his HR dept to take steps so that a new a/c is opened again in the same bank.

"Any money transaction to the said account by anybody is illegal"------------- all transactions that can be done in a normal savings a/c, can be done in a salary a/c. Some banks/employees caution/advise salary a/c holders not to deposit large sums in cash because their a/c statements might be scrutinised by income tax dept. I have done it myself, but the banks cannot forcibly stop someone from doing so. At best the banker can make enqueries if the transaction does not justify the a/c holder's profile and/or is of  suspicious nature.

"Bank has no right to correspond with the individual."------ bank can correspond with the salary a/c holder as it wishes. It is not required to route correspondence through the Co. HR/Admin dept (unless there is a specific instruction from the Co.to do so).

Hopefully this answers what you were looking for.

Kindly check if the bank has created a lien.You can speak to BM of the bank and obtain a/c statement, and ask for the letter citing reasons.Bank is under obligation to supply it.