As per the media reports, penalty fees on all overdrawn personal and business accounts is being dropped by the Australia-owned bank BNZ, from the beginning of September.

BNZ specified that it will not charge honor fees, dishonor fees and unpaid bill fees on transaction and savings accounts, which range between $5 and $35 every time an account goes into the red.

The account of the customer, in many cases, is overdrawn because of some payments coming out early or their salary going in a day late, which leads to a large number of complaints, says the bank.

BNZ, which is a subsidiary of National Australia Bank (NAB), is cutting its $A30 overdrawn charge from all personal savings accounts and personal transaction accounts from 1 October.

The further aim of the move is to lure customers, with NAB receiving more complaints about the fees than anything else.

"An overdrawn fee is paid when withdrawals from a bank account exceed the available balance, giving the account a negative balance," said the bank.