SBI charges for non-maintenance of minimum balance unfair: Report

The State Bank of India’s (SBI’s) charges for the non-maintenance of minimum balance were unreasonable, a report by a professor at the Indian Institute of Technology-Bombay has said. 

The SBI started charging fees for non-maintenance of minimum balance from April 2017, after a gap of five years, the monthly fees ranged between Rs 20 and Rs 100 till September 2017 and were later slashed in October last year. According to financial ministry data, the SBI collected Rs 24.34 billion for the financial year 2017 in penalty on non-maintenance of minimum balance alone. 

Later on, the bank slashed these charges by nearly 80 per cent in April 2018, and the charges currently range from Rs 5-15.

The public sector lender had earlier said that only 60 per cent of its accounts were subject to these charges. It also said that people should convert their accounts in Basic Savings and Basic Deposit Accounts to avoid penalty for non-maintenance of balance. 

“For April 2017, the SBI recovered Rs 2.35 billion as penalty from only 38.9 million of the 255 million savings bank accounts in question for not maintaining minimum monthly average balance,” said the report.

The report also said that the bank should reverse the penalties collected in FY17 for non-maintenance of minimum balance, in order to “not get portrayed as exploitative for the past year.”