SBI justifies minimum balance proposal, says charges levied to bear Jan Dhan costs

Justifying the charges which have been levied on the State Bank of India (SBI) accounts, chairman Arundhati Bhattacharya on Wednesday clarified that charges levied are necessary to compensate for operational costs incurred while managing Jan Dhan accounts and operating ATMs.

Addressing the media post an India SME Forum here, Bhattacharya said that the charges are also being levied to prevent taxpayers from paying extra towards the operational costs that are being spent by the banks.

"Managing ATMs comes with a charge, with regards to printing, transporting, counting and recycling currency notes, which are being paid indirectly by tax payers. This is creating an obstacle for account holders," she said.

Speaking on issue of loans, the SBI chairman claimed that lack of credibility is creating a need for vendors to process loans unofficially. "There is thus a necessity to maintain a bank balance to establish credibility to ensure that loans are made available at reasonable interest rates," she stated, stressing on the importance of switching to digital payments.

"With digitisation, it has become easier to facilitate digital payment. This is why we are urging citizens to reduce cash withdrawal. With this, the costs incurred in maintaining ATMs will be drastically reduced. The charges we have put in place are very reasonable in this regard," added Bhattacharya.

Furthermore, she stated that this charge is not applicable on the 11 crore Jan Dhan accounts that are registered with SBI.

The bank has initiated a 'work-from-home' policy, applicable for both men and women. On obtaining prior permission, employees have been given the opportunity to work from their home, in case of any emergency. Bhattacharya, however, stated that only a few tasks can be performed from home, owing to security reasons.

The SBI has proposed to charge an additional fee in case of minimum balance being less that Rs. 5,000 in cities and Rs. 1,000 in rural areas.