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."