NEW DELHI: Many major Indian lenders, including the nation's largest public sector bank State Bank of India (SBI) have been earning substantial amounts through the imposition of a variety of charges on zero-balance accounts.
Such accounts had been launched as an aid to the poor through the PM Jan Dhan Yojana and to bring the vast number of unbanked regions and individuals into the Indian banking system. According to a study released by IIT-Bombay, however, many banks have been charging excessive fees on Basic Savings Bank Deposit Accounts (BSBDA) for a variety of services.
The study observed that the SBI's decision to levy a charge of Rs 17.70 for every debit transaction beyond four by BSBDA account holders cannot be considered as "reasonable", adding that the imposition of service charges resulted in undue collections to the tune of over Rs 300 crore from among nearly 12 crore BSBDA holders of SBI during the period 2015-20.
India's second-largest public sector lender Punjab National Bank, meanwhile, which has 3.9 crore BSBD accounts, collected Rs 9.9 crore during the same period. "There had been systematic breach in the RBI regulations on BSBDAs by few banks," it said.
Levying of charges on BSBDA is regulated by the RBI's September 2013 guidelines, which state that such account holders are allowed more than four withdrawals in a month, at the bank's discretion provided the bank does not charge for the same.
"While defining the features of a BSBDA, the regulatory requirements made it amply clear that in addition to mandatory free banking services (that included four withdrawals per month), as long as the savings deposit account is a BSBDA, banks cannot impose any charge even for value-added banking services," it said.