Penalty for not maintaining minimum balance goes against the grain of financial inclusion.
With the Indian Banking system bearing the brunt of huge NPAs, thanks to loan defaulters, the country's largest lender State Bank of India collected Rs 1,771 crore during April- November 2017 as penalty from customers who couldn't maintain a minimum monthly average balance (MAB) in their accounts.
The money thus collected as penalty charges is more than the bank’s July-September quarter net profit of Rs 1,581.55 crore and nearly half of the Rs 3,586 crore it earned as net profit April-September, reported The Indian Express.
Penalty for not maintaining minimum balance goes against the grain of financial inclusion.
Many on Twitter have called out the bank for 'charging the poor' while letting go the rich by writing off their loans.
Congress spokesperson Priyanka Chaturvedi called SBI the 'SuitBoot Bank of India'. Gujarat Congress President Bharat Solanki also slammed the public sector bank, asking 'Are we punishing the poor for being too poor?'
Most banks levy a certian charge for not maintaining a minimum balance in accounts. The SBI had revised the minimum balance from Rs 5,000 to Rs 3,000 with effect from October 2017.
The revised charges for urban, semi-urban and rural centres were now Rs 3,000, Rs 2,000 and Rs 1,000 respectively. The bank had also revised penalty for non maintenance of MAB, reducing it between a range of 20%-50% across all categories and population groups.
PMJDY (Prime Minister's Jan Dhan Yojna) accounts and Basic Savings Bank Deposits Accounts (BSBD) are exempt from the charge.
However, SBI did not collect any money from levy of charges for non-maintenance of MAB during the 2016-17 financial year. The charges were re-introduced after a gap of five years during the current fiscal, the Express report said.
It was also the year that witnessed growing NPAs, reason for which SBI Chief Arundhati Bhattacharya said, was decline in the GDP growth.
Just a week ago, a parliamentary panel rapped the govt for not taking enough and efficient measures for containing NPAs (Non Performing Assets).
The Committee on Petition in its reports said that it is constrained to note that even after having a 'vigilance mechanism' in vogue in the banking system, there are incidences of fraud relating to non-performing assets (NPAs).
The committee has also made a case for amending banking laws, including the SBI Act, to provide for disclosure of names of loan defaulters.
The panel had recommended that the government make appropriate amendments in "the archaic provisions of the SBI Act and other relevant laws to disclose the names of individuals — who owe money to the Banks or are responsible for bad loans on account of their default to repay".