State Bank of India (SBI), the country's largest state-run lender has earned a whopping Rs1,771 crore as penalty income from customers for not maintaining minimum average balance during April to November 2017. This penalty income earned by SBI is more than its net profit of Rs1,581.55 crore earned during July to September 2017 quarter, say media reports.
According to report in Indian Express, the state-run lender has about 42 crore bank accounts, out of which around 13 crore opened under the Pradhan Mantri Jan Dhan Yojana or basic savings bank deposits accounts, both of which are exempt from penalty for not maintaining average balance. So, MAB penalty these charges would have been levied on defaulting accountholders among the remaining 29 crore, the report says.
Earlier in September and October 2017, responding to strong protests by customers, expressed most vociferously in social media, SBI while reviewing MAB requirements and charges for non-maintenance of MAB, had also decided to waive charges for closing savings bank account that are in existence for over six months. For non-maintenance of MAB, SBI has revised downward its charges ranging from 20% to 50% across all population groups and categories. The charges at semi-urban and rural centres range from Rs20 to Rs40 and at urban and metro centres from Rs30 to Rs50. The revised MAB requirement and charges will become applicable from October 2017.
SBI, the country's largest bank, had been levying Rs500 plus service charges (about Rs573) for closing savings account, post merger of its associate banks with itself on 1 April 2017. Post GST, this went up to Rs590 as banking service attracts a tax of 18%.
In September 2017,
Rajnish Kumar, the then Managing Director (present CMD) of SBI, had told IANS that the lender was expected to collect Rs2,000 crore as penalty on saving bank accounts which failed to maintain minimum balance and some part of this would be used to cover costs incurred in linking bank accounts to Aadhaar. “For maintaining savings bank accounts, there are certain costs. We have to invest heavily in technology. Our cost on technology every year is very high and that is more to take care of the transactions in (savings) accounts. The penalty realised, we will use it to recover our outgo on ATMs. On business correspondents (BCs) channel, SBI incurs a loss of more than Rs 400 crore. We are incurring a cost of almost Rs 2,000 crore on business correspondents channel and ATMs per year. At least we should be able to recover that (from the penalty)," he had said.
An online petition launched by us on Change.org has garnered more than two lakh signatures. (
Sign the Petition). One of the key points of the petition is about unreasonable and unfair bank charges. "Frequent increase in charges and billing customers by stealth through opt-out clauses that are not noticeable must be stopped immediately. For e.g. HDFC Bank started levying charges for an invite-only program, which unethically assumes that the customer is already in and willing to pay for it. The levy is stopped only when the consumer notices it and calls the bank to protest; this too is not an easy process," the petition says.
In September 2017, even the staff of Reserve Bank of India (RBI) had raised issue of unfair charges levied by SBI, asking the regulator to wake up to ground level reality and take necessary action against such practices.
Earlier on 12 May 2017, a group, including well known NGOs, trade unions, finance editors and experts, presented a 1,100 page printout of over 100,000 signatures to an online petition at Change.org to M Veerappa Moily, Chairman of Parliamentary Standing Committee on Finance.
SBI have a network of about 24,000 branches (post merger of associate banks with SBI) and more than 42 crore customers of which 31 crore have savings bank accounts.
