For the financial year 2017-18, 21 public sector banks and 3 private sector banks collected a total of ₹5000 cr as fines from depositors for not complying with their minimum balance requirement standards.
SBI accounted for almost 50% of the fines collected by banks. HDFC Bank, ICICI and Axis Bank constituted for about 30% of the fine amount collected. SBI collected ₹2,433 cr, HDFC Bank collected ₹590.84 cr and Axis Bank collected ₹530.12 cr. SBI freed all penalty charges in 2012 but re-introduced it in April last year. However, it faced severe criticism for its charges. So in October again it revised its charges.
Despite all this, SBI leads for amounting to nearly half the collection. It is also noteworthy here that SBI has set low minimum balance requirement when compared to HDFC and ICICI (₹10,000 for metro and urban customers).
Depositor grievances
Depositors often complain about fines levied even if the minimum balance is not met by a few rupees. Though RBI has provided banks with the incentive to levy charges for not maintaining average minimum balance, it has warned banks to avoid harassing depositors with strict penalties.
The minimum balance set by SBI in June 2017 was ₹5,000 for metro and urban customers. According to the data revealed by the Finance Ministry, ₹17.72 billion was collected by SBI from June 2017 – January 2018 for not maintaining minimum balances. This was later revised in January 2018 after severe backlash from the public. Now the minimum balance is set at ₹3,000 for metro and urban customers.
Accounts exempted from minimum balance
Basic Savings Bank Deposit (BSBD) and Pradhan Mantri Jan Dhan Yojna are exempted from maintaining minimum balances.