Banks collect more than Rs.11,000 crore over the last four years for failure to maintain minimum balance

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According to the Lok Sabha, banks across the country, 21 private sector banks and 3 public sector banks, have collected Rs.11,528 crore as penalty for non-maintenance of minimum balance between FY 2014-2015 and FY 2017-2018. Due to backlash from the public, which forced State Bank of India to reduce its penalty charges in October 2018, according to the Lok Sabha report, the largest bank in the country collected more than Rs.2,000 crore between FY 2014-2015 and FY 2016-2017, and in FY 2017-2018, the bank collected penalties for non-maintenance of minimum balance amounting to Rs.4,990 crore.

Banks-Penaltes
Banks collect more than Rs.11,000 crore over the last four years for failure to maintain minimum balance

Apart from State Bank of India, one of the leading private banks, HDFC Bank, collected Rs.500 crore between FY 2014-2015 and FY 2017-2018 for non-maintenance of minimum balance in savings accounts. ICICI Bank and Axis Bank has also collected around Rs.300 crore each as penalties for non-maintenance of minimum balance for the same period. Other banks collected penalties exceeding Rs.100 crore for non-maintenance of minimum balance in savings accounts.

To help customers who are not able to maintain a minimum balance in their savings account, the Government of India rolled out the Basic Savings Bank Deposit Accounts (BSBDA) through the Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme or in other words, the zero-balance account. For such accounts, account holders do not need to maintain a minimum balance in their account.

Source: The logical Indian

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