Banks Collect Rs 5,000 Crore From Customers As Minimum Balance Penalty In FY18

New Delhi: 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. The 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 (Rs. 4,989.55 crore).
But for the additional income of Rs. 2,433.87 crore under this head, SBI’s losses would have soared further. After SBI, the largest amount of charges for not maintaining minimum balance during 2017-18 was collected by HDFC Bank. It charged its customers Rs. 590.84 crore, which is lower than Rs. 619.39 crore in 2016-17, the data revealed. Axis Bank collected Rs. 530.12 crore in the last fiscal while ICICI Bank charged Rs. 317.6 crore.
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 October 1, 2017. According to the RBI norms, banks are permitted to levy sevice/miscellaneous charges. Customers opening accounts under Basic Savings Bank Deposit (BSBD) scheme as well as Pradhan Mantri Jan Dhan Yojna are not required to maintain any minimum balance.

(Except for the headline, this story has not been edited by The Kashmir Monitor staff and is published from a syndicated feed.)