Now, RBI Staff Start Complaining about SBI’s Charges!
Moneylife Digital Team 13 September 2017
Poor retail consumers trying to draw the attention of regulators about extortionate banking service charges now have an unlikely ally: employees of the Reserve Bank of India (RBI)!
 
Banks have been increasing the penalty and other charges on customers -- because the RBI’s regulations give them a free hand to do so. They do not need the permission of the RBI to levy on customers. This gives the veneer of competition in a sector where switching costs are high. This is now hitting the staff of RBI as well. The All India Reserve Bank Employees Association (AIRBEA) is seeking RBI Governor's intervention on charges and penalty levied by State Bank of India (SBI) on account holders.
 
Samir Ghosh, General Secretary of AIRBEA, in a letter to RBI Governor Dr Urjit Patel, has said, "We are being constrained to draw your kind attention to certain recent business decisions of the country's largest bank SBI like withdraw cash only three times a month free of charge and fine failure to maintain balance."
 
"We urge that Section 35A of Banking Regulation Act, 1949 do empower Reserve Bank to give directions to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors," Ghosh had said in the letter.
 
Highlighting the apathy of small depositors, the employees union says, for savings bank accounts held in metro branches, the required minimum average monthly balance is Rs5,000, and if the amount falls below Rs3,750, SBI levies a penalty of Rs100 plus service tax. The charges and minimum account balance vary across metro, urban, semi-urban and rural areas. According to reports, during the June 2017 quarter, SBI had earned Rs235 crore only from such fines, which goes directly to its net profit. 
 
Moneylife Foundation has been at the forefront of speaking up for bank customers. Earlier, on 4th July, thousands of people joined the unique #TweetMorcha against arbitrary bank charges, with the hashtag #BankSeBachao trending at top spot in India and also featuring in worldwide trends that afternoon. People from across the globe sent tweets to @NarendraModi and @ArunJaitley with the hashtags of #BankSeBachao and #TweetMorcha. 
 
An online petition launched by us on Change.org has garnered more than two lakh signatures. (Sign the Petition). One of the key points of the petition is about unreasonable and unfair bank charges. "Frequent increase in charges and billing customers by stealth through opt-out clauses that are not noticeable must be stopped immediately. For e.g. HDFC Bank started levying charges for an invite-only program, which unethically assumes that the customer is already in and willing to pay for it. The levy is stopped only when the consumer notices it and calls the bank to protest; this too is not an easy process," the petition says.
 
With RBI’s own staff now raising issue of unfair charges levied by SBI, it is high time that the regulator wakes up to ground level reality and take necessary action against such practices. 
 
Earlier on 12 May 2017, a group, including well known NGOs, trade unions, finance editors and experts, presented a 1,100 page printout of over 100,000 signatures to an online petition at Change.org to M Veerappa Moily, Chairman of Parliamentary Standing Committee on Finance.
 
The Moneylife Foundation Campaign has certainly ruffled several feathers at the Reserve Bank as can be seen by some decisions taken by the regulator. This includes limiting customer liability, asking banks to share details of transactions in passbook or statements, expanding the role of the Banking Ombudsman. However, there is so much more that the Reserve Bank needs to do, like making its Consumer Charter more effective and effectively curtailing the practice of mis-selling and unfair service charges.
 
SBI have a network of about 24,000 branches (post merger of associate banks with SBI) and more than 40 crore customers of which 31 crore have savings bank accounts.    
Comments
VIMAL KUMAR
4 years ago
New rule by SBI..."The account holder must come personally to the bank to withdraw cash
if they want to use card swiping facility located at the cash counter". others must use the ATM machine . The idea is , after the implementation of number of cash withdrawal limit in ATM more people started using the card swiping facility. In villages and small towns ,normally woman and old /sick people send their children with atm cards for bank transactions.If they use the counter facility it is not chargeable whereas ATM withdrawal is chargeable. 'WHAT AN IDEA SETHJI'''''
Gupta
4 years ago
Somebody has to pay the bills of corruption i.e. read NPAs. These 100 rupees each is what they hope will fill the hole of NPA losses of lacs of crores created with impunity during the previous govt's misrule
Shirish Sadanand Shanbhag
Replied to Gupta comment 4 years ago
I fully agree with your view.
What best we can do to bring the SBI charges at par with earlier days.
Gupta
Replied to Shirish Sadanand Shanbhag comment 4 years ago
Protest and support Moneylife.... or simply close your SBI accounts. That's all that we can do.
gvn rojarao
4 years ago
SBI chairman is against to small deposit holders she suking to small investors money by way of hidden charges, please stop this robbery.
Shirish Sadanand Shanbhag
Replied to gvn rojarao comment 4 years ago
SBI's Chairperson is just a show piece doll.
If our finance minister is sensible, then he can bring the SBI's unethical bank charges to its normal earlier charges.
Gupta
Replied to Shirish Sadanand Shanbhag comment 4 years ago
He certainly can, but it is worth thinking whether he should? Should a Fin Minister of a country be spending his time on deciding 100 rupee min bal charges that banks should charge or not charge? Has he got nothing better to do?
A BANERJEE
4 years ago
It is doubtful if RBI acts on this also. Why the MoF is silent is another mystery.
Shirish Sadanand Shanbhag
Replied to A BANERJEE comment 4 years ago
MOF is not interested in Bank's customer services issue.
For him Acche Dins have already come, till year 2019.
Gupta
Replied to Shirish Sadanand Shanbhag comment 4 years ago
We Indians get a sense of satisfaction in critising the Govt for every damn thing in the world. Why do you think Govt should intervene or even look at this matter when SBI has its Board and there is a body called RBI in existence?
Sucheta Dalal
Replied to Gupta comment 4 years ago
It is the job of the finance ministry to ensure that regulators are accountable. Over the last decade this has gone for a toss. So yes, it is our right and our duty as citizens to HOLD our elected representatives accountable -- not for "every damn thing" as you seem to imagine -- but for things that are directly within their domain and a reflection of their failure to demand and ensure accountability. This applies not merely to RBI, but even more to IRDAI and SEBI. And yes, we will ONLY hold elected representatives accountable for it -- that is why we have put them in parliament with all the perks and privileges!
Gupta
Replied to Sucheta Dalal comment 4 years ago
That is a perspective which i respect but I beg to differ. There has to be segregated roles and responsibilities to ensure priority of issues does not suffer and Govt is not micromanaging. RBI is an arm of Govt and should be responsible here. Govt cannot and should not poke its nose on such matters. They can / should review RBI's performance on various metrics at high level but not get down to giving directives at transactional level.
majad
4 years ago
SBI has debited Rs 59.00 from my SB a/c stating that " Fee Excess DRS ".What is DRS?
Mrinal Thakkar
Replied to majad comment 4 years ago
all banks have a certain number of debits per quarter which they allow , above that , they will charge you , present with all banks especially in lower AMB accounts . its best to ask your bank manager abt the limit.
Ramesh I
4 years ago
Just as the Govt makes scapegoats out of middle-class salaried taxpayers to fund its grandiose 'welfare schemes' (including to illegal immigrants from Bangladesh and Rohingya Muslims from Myanmar now, many having the ubiquitous Aadhar Card !), PSU Banks have started fleecing regular S.B. A/c holders to fund its JDY A/c maintenance costs and also pay hefty salaries to its inefficient laidback staff. RBI has failed as a regulator to protect the interests of common Bank customers, though it has a Dy Gov who is supposed to address consumer grievances and improve service levels in PSU Banks.
B. Yerram Raju
4 years ago
The system does not recognize the account holder from the RBI distinctly to confer any favor.
Kotak Mahindra Bank Ltd., that gives 6% on its premium SB account does not give either a Pass Book or statement of account even once in a quarter in the name of digital banking! On top, charges around Rs.400 if you ask for a statement!! This is service to the customer. It is a different issue that they reversed the charges when I threatened to close the account as closing account entails one time charge!!
Mrinal Thakkar
Replied to B. Yerram Raju comment 4 years ago
they send you email statements every month without fail , pls start taking a printout of it , and they do issue passbook. statements are also present inside your net banking account. I agree they have charges when you try to get physical statement from the branch
Govinda Warrier
4 years ago
Interesting analysis and interpretation. Trade Unions in Government Establishments and PSUs have a tradition of taking up public interest issues. But, unfortunately, they used to get media attention only when public get disturbed due to strike calls or agitations with focus on wage related issues.The reason being, media is owned by private sector which is not comfortable with workers getting organized.
ksrao
4 years ago
It is high time we rechristened SBI as Stout Bank of India, too fat to move fast.
bharatkumar chandulal shah
4 years ago
recently i came across surprising procedure to credit cash in saving bank account at the bank branch counter, that requires your ATM card and enter your details including password .There was written notice board at the counter instructing the same. is it now regular procedure?
bharatkumar chandulal shah
Replied to bharatkumar chandulal shah comment 4 years ago
it is at SBI branch.
Mrinal Thakkar
Replied to bharatkumar chandulal shah comment 4 years ago
yes , many banks have cash deposit machines , in BOI though you dont need ATM card , just your account number is fine
bharatkumar chandulal shah
Replied to Mrinal Thakkar comment 4 years ago
yes, i appreciate the facility of cash deposit machines, but what i found , it is at manned window, where it requires ATM and entry by you. THEN WHAT IS THE PURPOSE OF THE STAFF EMPLOYED THERE?
g k agrawal
4 years ago
A good initiative by Money Life. in the name of Deregulation of ground level conditionalities, SBI has become anti small depositors. RBI must intervene to protect interest of depositors.
Mrinal Thakkar
Replied to g k agrawal comment 4 years ago
only SBI is being highlighted , all banks levy charges similar to SBI , its just that SBI being the largest bank , many people having accounts and thus coming in limelight
SuchindranathAiyerS
4 years ago
The child is the father of the man!!!
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