SBI collected Rs 300 crore from zero balance accounts in 5 years: IIT-Bombay study

Several banks, together with the State Bank of India (SBI), have been imposing extreme prices on sure providers offered to poor individuals having zero-balance or Basic Savings Bank Deposit Accounts (BSBDA), a study by the IIT-Bombay has revealed.

The study noticed that the SBI’s resolution to levy a cost of Rs 17.70 for each debit transaction past 4 by the BSBDA account holders can’t be thought of as “reasonable.”

It highlighted that the imposition of service prices resulted in undue collections to the tune of over Rs 300 crore from amongst practically 12 crore Basic Savings Bank Deposit Account (BSBDA) holders of SBI through the interval 2015-20.

India’s second-largest public sector lender Punjab National Bank, which has 3.9 crore BSBD accounts, collected Rs 9.9 crore throughout the identical interval.

Read | How to open SBI savings account online: Step-by-step guide

“There had been a scientific breach in the RBI rules on BSBDAs by few banks, most notably by the SBI that hosts the utmost variety of BSBDAs, when it charged @ Rs 17.70 for each debit transaction (even through digital means) past 4 a month.

“This imposition of service prices resulted in undue collections to the tune of over Rs 300 crore from amongst practically 12 crore BSBDA holders of SBI through the interval 2015-20, of which the interval 2018-19 alone noticed a group of Rs 72 crore and the interval 2019-20, Rs 158 crore,” the study by IIT Bombay professor Ashish Das stated.

Levying of charges on BSBDA is guided by September 2013 RBI guidelines. As per the direction, these accounts 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 that a bank may like to offer at their discretion,” the study said.

The RBI considers a withdrawal, beyond four a month, a value-added service, it said.

“We assess the dereliction in SBI’s duty towards the PMJDY when the BSBDA users were unduly (and against the extant regulations) forced to part with such high charges for their day-to-day (noncash) digital debit transactions that the bank allowed in a BSBDA,” it said.

SBI, in breach of RBI regulations set forth as early as 2013, had been charging the BSBDA holders for every debit transaction beyond four a month, it said, adding, the charges were as high as Rs 17.70 even for digital transactions like NEFT, IMPS, UPI, BHIM-UPI and debit cards for merchant payments.

“On the one hand, the nation strongly promoted digital technique of funds, whereas however, SBI discouraged these very individuals, to transact digitally for his or her day-to-day expenditures, by charging an exploitative Rs 17.70 per digital transaction. This dwarfed the spirit of economic inclusion,” it said.


The RBI’s nonchalant attitude to supervise its own regulations encouraged other banks to become unreasonable towards charges beyond four debits a month, it said.

For example, it said, effective January 1, 2021, IDBI Bank’s Board of Directors considered it reasonable to impose a service charge of Rs 20 for every non-cash digital debit (including UPI/BHIM-UPI/IMPS/NEFT and debit card use for merchant payments).

Even ATM cash withdrawals come at an exorbitant fee of Rs 40. Needless to mention that the bank also imposes a debit freeze beyond 10 debits a month by IDBI Bank.

“Although not by intent, however in follow RBI has allowed victimisation of those BSBDA clients regardless of being duty-bound to guard them. Two of its specialised departments the Consumer Education and Protection Department’ and the Financial Inclusion and Development Department’ allowed this to proceed over years although RBI rules for making certain the reasonableness of service prices had been in place,” the study claimed.

When SBI charged for every UPI/BHIM-UPI and RuPay digital payments though RBI was approached first to address the same under extant laws, it remained silent, the study said, adding it was the government, which when subsequently approached, that came forward to instruct the banks (on August 30, 2020), to retrospectively (since January 1, 2020) return the cash to the depositors or face penal penalties.

Despite this respite, the RBI nonetheless wants to make sure compliance of its personal rules when SBI nonetheless considers itself compliant whereas charging as excessive as Rs 17.70 for each digital debit transaction, by means of means aside from UPI/BHIM-UPI and RuPay-digital, carried out since January 2020.

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