SBI and It's 'Seizing' Policies
Author: Thamanna Abdul Latheef
30 Jan 2018
The State Bank of India, country's largest public sector bank, recently levied charges on its account holders for not having the minimum balance in their accounts. Though SBI didn't collect any money from levy of charges during 2016-17 fiscal year, the data released by the Finance Ministry have shown the bank has collected Rs 1771 crore as charges from below minimum balance accounts in April-November. SBI's July- Sep quarter net profit was Rs 1581.55 crore while, Rs 3586 crore was earned as net profit in April-September.
Though the bank has a total of 42 crore savings bank accounts of which 13 crore are Basic Savings Bank Deposits Accounts and Pradhan Mantri Jan Dhan Yojana accounts, both categories exempted from levy of such charges. Apart from that, pensioners, beneficiaries of social benefits as well as minors also exempted from levy of these charges with effect from October 1. The charges were re-introduced after a gap of five years during the current fiscal and now, the SBI account holders will have to maintain a monthly average balance (MAB) of Rs 3,000, instead of Rs 5,000.
Between April and September, SBI imposed these charges in metro, urban and rural centres as well. In the month of September, it has reduced the MAB requirement for its customers in metro cities to Rs 3,000 from an earlier Rs 5,000. For metro centres, the failure to meet Rs 5000-balance attracted Rs 50 charge for 50 per cent shortfall, Rs 75 for shortfall between 50-75 per cent and Rs 100 for 75 per cent or more shortfall.
The combined bad loans of 21 public sector banks (PSBs) are estimated at Rs 7.33 lakh crore as at the end of September 2017. According to Reserve Bank of India, PSBs had written off Rs 2.28 lakh crore in bad loans in nine years to fiscal 2015-16. As per the data compiled Investment Information & Credit Rating Agency (ICRA), PSBs have written off loans of Rs 55,356 crore during April-September 2017, nearly 54% more compared to the same period last fiscal.
Earlier in June quarter of 2017, SBI collected Rs 235 crore in minimum balance fine from 388.74 lakh accounts. This information was furnished by a Mumbai-based Deputy General Manager rank officer of the bank's operations department. The bank hasn't even revealed the categories of accounts on which the fine has been levied for non-compliance with its minimum balance requirements.
Though the bank has deducted money from the customers to overcome the loss which Non-Performing Assets (NPA) have created, the list of revised charges of SBI, failure to maintain monthly average balance will attract penalty of up to Rs 100 plus service tax.