What action can an institution take if a customer exceeds withdrawal limits for 3 consecutive months?

The appropriate action that an institution can take when a customer exceeds withdrawal limits for three consecutive months is to close the account and move funds to a time deposit account. This measure aligns with the regulatory requirements for certain types of accounts, such as savings accounts, which typically have established withdrawal limits.

When a customer frequently exceeds these limits, the institution must ensure compliance with these regulations while also managing the account appropriately. By transferring funds to a time deposit account, the institution can protect both their and the customer's interests. Time deposit accounts often have stricter withdrawal terms, which can help mitigate the risk of excessive withdrawals.

This course of action not only addresses the issue of non-compliance with withdrawal limits but also encourages the customer to consider the nature and terms of their account, aligning their usage with appropriate products that meet their financial habits. This is a constructive and regulatory-compliant way to manage accounts while also upholding the institution's policies.