SBI justifies penalty for not keeping minimum balance, says need money to bear Jan Dhan costs
The bank also said it has not received any “formal communication” from the government for re-considering the penalty and it will take a call “if something comes”. It also clarified the penalty would not apply to Jan Dhan accounts.business Updated: Mar 08, 2017 19:47 IST
Facing backlash for levying penalty on non-maintenance of minimum balance in accounts, the SBI on Wednesday justified its move saying the bank needs to impose some charges to balance the “burden” of managing a large number of no-frills Jan Dhan accounts.
The bank also said it has not received any “formal communication” from the government for re-considering the penalty and it will take a call “if something comes”. It also clarified the penalty would not apply to Jan Dhan accounts.
Last week, the country’s largest lender decided to re- introduce penalty on non-maintenance of minimum balance in accounts and also revised charges on other banking services. The new charges would be applicable from April 1. The move by the state-run banking major faced a lot of criticism, including from the opposition parties.
“Today, we have lot of burden such as we have 11 crore financial inclusion or Jan Dhan accounts. To manage such a large number of Jan Dhan accounts, we need some charges. We have considered many factors and after analysing carefully, we have taken this step,” SBI chairperson Arundhati Bhattacharya told reporters on the sidelines of a women entrepreneurs’ national convention.
As per the list of revised charges of SBI, failure to maintain Monthly Average Balance (MAB) in accounts will attract penalty of up to Rs 100 plus service tax.
In metropolitan areas, there will be a charge of Rs 100 plus service tax, if the balance falls below 75 per cent of the MAB of Rs 5,000. If the shortfall is 50 per cent or less of the MAB, then the bank will charge Rs 50 plus service tax.
The charges and MAB varies according to the location of bank. It is minimum in case of rural branches.
Bhattacharya said all the banks have minimum balance requirement for account holders and SBI as such has the lowest minimum balance requirement.
She said the penalty was there earlier also and SBI was the only bank to withdraw it in 2012.
“Our analysis have shown that most of the account holders maintain more than Rs 5,000 on a monthly basis and so they do not have to worry about any penalty,” Bhattacharya said.
She clarified that the penalty on non-maintenance of minimum balance will not be applicable on Jan Dhan accounts.
Asked about the government’s direction to the bank to reconsider the decision, SBI’s Managing Director Rajnish Kumar (National Banking) said the bank has not received any communication on this issue.
“There is no formal communication. We will see if something comes,” Kumar said.