Banks Collect Rs 5,000 Crore From Minimum Balance Penalty
As many as 21 public sector banks and three major private sector lenders collected a whopping Rs 5,000 crore from customers for non-maintenance of minimum balance in their accounts in 2017-18, according to banking data.
India’s largest lender State Bank of India, which suffered a staggering net loss of Rs 6,547 crore during 2017-18, led the pack in penalising its customers for not maintaining minimum account balance.
Government-owned SBI, which re-introduced the penalty on deposits going below monthly average balance basis from April 2017, collected nearly half the amount raised by the 24 banks put together of Rs 4,989.5 crore.
After SBI, the largest amount of charges for not maintaining minimum balance during 2017-18 was collected by HDFC Bank Ltd. It charged its customers Rs 590.84 crore, which is lower than Rs 619.39 crore collected in 2016-17, the data revealed.
Private lender Axis Bank Ltd. collected Rs 530.12 crore in the last fiscal while ICICI Bank Ltd. charged Rs 317.6 crore from its customers. SBI was charging the penalty on failure to maintain monthly average balance requirement till 2012 and again re-introduced it from April 1, 2017.
Following the criticism, SBI reduced charges with effect from Oct. 1, 2017.
According to the RBI norms, banks are permitted to levy service/miscellaneous charges. Customers opening accounts under Basic Savings Bank Deposit scheme as well as Pradhan Mantri Jan Dhan Yojna are not required to maintain any minimum balance.