In 5 years, SBI earns Rs 300 crore from zero balance accounts for specific services: report

According to an IIT-Bombay report, many banks, including the State Bank of India (SBI), have been charging exorbitant fees for some services offered to poor people with zero-balance or Basic Savings Bank Deposit Accounts (BSBDA).

According to the report, the SBI’s decision to charge a fee of Rs 17.70 for every debit transaction made by BSBDA account holders more than four could not be deemed “rational.”

It stated that the imposition of service charges resulted in over Rs 300 crore in unjustified collections from nearly 12 crores SBI 2015-20 Basic Savings Bank Deposit Account (BSBDA) holders.

In 5 years, SBI earns Rs 300 crore from zero balance accounts for specific services: report

Punjab National Bank, India’s second-largest public sector lender, received Rs 9.9 crore from 3.9 crore BSBD accounts during the same time.
“During the period 2015-20, this imposition of service charges resulted in excessive collections to the tune of over Rs 300 crore from among nearly 12 crores BSBDA holders of SBI, of which the period 2018-19 alone saw a collection of Rs 72 crore and the period 2019-20, Rs 158 crore,” according to the study by IIT Bombay professor Ashish Das.

The levying of charges on BSBDA is governed by RBI guidelines issued in September 2013. According to the directive, these account holders are permitted to make more than four withdrawals per month at the bank’s discretion, provided the bank does not charge for the same.

“While specifying the features of a BSBDA, the regulatory criteria made it sufficiently clear that, in addition to obligatory free banking services, banks cannot enforce any charge except for value-added banking services that a bank may wish to provide at their discretion,” according to the report.

The RBI considers withdrawals above four per month to be a value-added operation, it said. SBI, in violation of RBI regulations established as early as 2013, charged BSBDA holders for any debit transaction above four per month, it said, adding that the charges were as high as Rs 17.70 even for digital transactions such as NEFT, IMPS, UPI, BHIM-UPI, and debit cards for merchant payments.

According to the report, the RBI’s casual attitude toward supervising its regulations allowed other banks to become irrational in charging fees for more than four debits per month. Even ATM withdrawals are charged an exorbitant Rs 40 price. Also, IDBI Bank imposes a debit freeze after ten debits per month.


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