Public Sector Banks Collect Rs 1,996 Crore As Minimum Balance Penalty In FY19
A customer holds new Indian two thousand rupee banknotes for a photograph outside an India Post branch in New Delhi (Photographer: Anindito Mukherjee/Bloomberg)

Public Sector Banks Collect Rs 1,996 Crore As Minimum Balance Penalty In FY19

Bookmark

Public sector banks collected Rs 1,996.46 crore in penalty from customers for not keeping minimum monthly balance in savings account in 2018-19, the Parliament was informed on Monday.

In 2017-18, the 18 public sector banks collected Rs 3,368.42 crore by levying minimum balance penalty. This amount was sharply higher than Rs 790.22 crore collected in 2016-17.

"The reduction in the amount through levy of charges by PSBs during 2018-19 include reduction in charges for non-maintenance of balance by State Bank of India, with effect from Oct. 1, 2017," Minister of State for Finance Anurag Singh Thakur said in a written reply to the Lok Sabha.

SBI charged the penalty till 2012 and reintroduced it from April 1, 2017.

Following criticism for levying high charge, SBI reduced the penalty with effect from Oct. 1, 2017.

Thakur said the banks do not levy any such penalty on basic savings bank accounts including those opened under Pradhan Mantri Jan Dhan Yojana.

Till March-end 2019, there were 57.3 crore Basic Savings Bank Deposit accounts across the country, including 35.27 crore Jan Dhan accounts, as per Reserve Bank of India. There is no minimum balance penalty for these accounts, Thakur said.

BSBD accounts provide certain basic minimum facilities free of charge.

For accounts other than BSBD accounts, banks are permitted to fix service charges on various services rendered by them. Banks must ensure that such charges are reasonable and not out of line with the average cost of providing these services, as per RBI guidelines.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.