Several banks, including the State Bank of India (SBI), had previously placed excessive charges on certain services provided to the poor with zero-balance or Basic Savings Bank Deposit Accounts (BSBDA), a study by IIT-Bombay has revealed. The study found that the SBI’s decision to charge Rs 17.70 for all overdrafts by BSBDA account holders would not be considered “appropriate.”
It was noted that the deposit of service fees resulted in the unnecessary collection of more than Rs 300 for the approximately 12 crore holders of the SBI Basic Savings Bank Deposit Account (BSBDA) during 2015-20. The second largest lender of the Indian public sector Punjab National Bank, with 3.9 BSBD accounts, collected Rs 9.9 crore at the same time.
There have been systematic violations of RBI rules on BSBDAs by several banks, most notably by the SBI which holds the highest number of BSBDAs, where it charges @ Rs 17.70 for all debit items (even digital means) for more than four months. “This service charge has resulted in the unnecessary collection of more than Rs 300 crore from the approximately 12 crore BSBDA in charge of SBI during the 2015-20 season, when the 2018-19 season alone saw a collection of R2 72 million over the current period. -2019-20, Rs 158 crore, “said research by IIT Bombay professor Ashish Das.
The BSBDA case review is guided by the September 2013 RBI guidelines. According to the guidelines these account holders are allowed to withdraw more than four times a month, at the discretion of the bank as long as the bank does not charge the same.
While defining the features of the BSBDA, legal requirements have made it clear that in addition to free banking services (including four monthly withdrawals), as long as the savings deposit account is BSBDA, banks cannot charge any fees for additional banking services that the bank wishes to donate in its view, “says the study.
The RBI is considering withdrawing, more than four times a month, a value-added service, it said. “We are examining the reduction in SBI activity in relation to PMJDY where BSBDA users have been unjustly forced (and opposed to existing laws) to be forced to part with such a high cost of daily transactions (noncash) by BSBDA,” he said.
The SBI, in violation of RBI rules enacted in early 2013, was charging BSBDA holders for all bank overdrafts for more than four months, said the fee, adding that, in addition, cases were as high as Rs 17.70 and even digital transactions such as NEFT, IMPS. , UPI, BHIM-UPI and debit card debit cards. “On the one hand, the country strongly encouraged digital payment methods, and on the other hand, the SBI encouraged the same people to work digitally with their daily income, by charging Rs 17.70 for digital transactions. This has reduced the investment climate,” he said.
The RBI’s negligence in regulating its rules has prompted some banks to be ignorant of more than four debts a month, it said. For example, it said that, as of January 1, 2021, the Board of Directors of IDBI Bank has considered it reasonable to charge a service fee of Rs 20 on all non-cash payments (including UPI / BHIM-UPI / IMPS / NEFT and credit card use with merchant payments) .
Even ATM withdrawals come at a hefty fee of $ 40. Needless to say, the bank also filed a withdrawal of more than 10 debts per month by IDBI Bank. “Although not intentionally done, the RBI actually allowed the harassment of these BSBDA customers even though they were obliged to protect them. Its two specialized departments, the Department of Consumer Education and Security and the ‘Department of Integration and Development Finance’, have allowed this to continue over the years. well paid, “says the study.
While the SBI charged all fees paid through UPI / BHIM-UPI and RuPay although the RBI was first approached to deal with the same under existing laws, it remained silent, the study said, adding that it was the government, which, when approached, came to instruct the banks (August 30, 2020), to return (from January 1, 2020) to reimburse those who invested or face the consequences of the penalty. Apart from this break, the RBI still needs to ensure compliance with its regulations as SBI still considers compliance while charging up to Rs 17.70 in all digital transactions, using methods other than UPI / BHIM-UPI and RuPay-digital, made from January 2020.