are banks allowed to make my bank account balance negative by applying some charges like penalty, sms, maintanence etc?

Yes. They do. They call it hold balance

Yes

yes they can 

but for minimum balance charges if you didnt paid for 6 months and charges accumulated in the account with account becoming dormant with negative, you can fight with bank using RBI ombudsman i think, to get waver of non-maintenance of minimum balance CHARGES cancelled (read somewhere so heard on street not verified) 

I am not sure but I read somewhere that rbi has told banks that they cant make the balance negative for low maintenance charges.

they don't call it negative now but create a lien, same fraud but different name