A study by IIT-Bombay found that the State Bank of India and several other banks in the country have placed excessive charges on certain services provided to those with zero balance or basic savings accounts (BSBDA). According to the study, the decision by SBI, the country’s largest public lender, to charge BSBDA account holders a fee of Rs 17.70 for any direct debit transaction in excess of four is not “sensible”.
The study found that SBI raised over Rs.300 billion by collecting service fees over the 2015-2020 period. The Punjab National Bank, which has BSBD accounts valued at 3.9 crore, came second with a collection of Rs 9.9 crore over the same period.
“Few banks, especially the SBI, which houses the maximum number of BSBDAs, systematically violated the RBI regulations for BSBDAs by charging 17.70 Rs per month for each direct debit transaction (including digital) in excess of four. This collection of service charges resulted in inappropriate collections of over Rs300 billion among nearly 12 crore BSBDA holders of SBI in 2015-2020, of which Rs 72bn in 2018-19 alone and in 2019 -20, Rs 158 crore, “reads IIT Bombay Professor Ashish Das’ study.
It should be noted that the charging of fees on BSBDA is carried out in accordance with the RBI guidelines published in September 2013. According to the instruction, these account holders may, at the discretion of the bank, make more than four withdrawals per month, not calculated for the same.
“In defining the characteristics of a BSBDA, the regulatory requirements made it clear that in addition to the mandatory free banking services (including four withdrawals per month), as long as the savings account is a BSBDA, banks cannot even charge for banking services Added value that a bank would like to offer at its own discretion, “says the study.
The study found that a deduction of more than four per month is a value-added service, according to RBI.
“We evaluate SBI’s failure to comply with duty to PMJDY when BSBDA users were wrongly (and against applicable regulations) forced to part with such high fees for their daily (non-monetary) digital debit transactions that the bank in a BSBDA, “it said.
