SBI Refunds Charges Collected on Digital Transactions in Zero-balance Accounts; Continues To Levy Charges above 4 Cash Withdrawals
Moneylife Digital Team 15 April 2021
State Bank of India (SBI) today issued a clarification saying it has refunded charges deducted on digital transactions from zero-balance or basic savings bank deposit (BSBD) account-holders. However, SBI added that it continues to levy charges on cash withdrawals over and above the four free withdrawals which are allowed per month.
In a release, the State-run lender said, “In terms of Central Board of Direct Taxes (CBDT) directives, SBI has refunded the charges recovered in respect of all the digital transactions to the BSBD customers from 1 January 2020 to 14 September 2020. SBI has stopped recovering charges in such accounts on all digital transactions from 15 September 2020, while retaining charges on cash withdrawals over and above four free withdrawals allowed per month. The objective is also to encourage BSBD account holders including Pradhan Mantri Jan Dhan Yojana (PMJDY) account holders to adopt digital payment through the prescribed modes vis-à-vis the cash transactions.”
The clarification comes in the wake of media reports based on the findings of a study by IIT Bombay. A study by IIT-Bombay had revealed that SBI and several other banks have been imposing excessive charges on certain services which are provided to those with zero balance, BSBD accounts. 
Earlier this week, Moneylife wrote about how SBI has been imposing excessive service charges on zero-balance accounts and it had collected a whopping Rs300 crore by levying service charges during the period 2015-20. 
In August 2012, Reserve Bank of India (RBI) had said that banks are free to levy charges in BSBD accounts beyond four free transactions. The availing of such additional services shall be at the option of the customers.
In the clarification issued today, SBI said that the Bank introduced charges for debit transactions beyond four free transactions in BSBD accounts with effect from 15 June 2016 after prior intimation to customers. 
But, subsequently, in August 2020,  CBDT directed all banks to refund the charges collected, if any, on or after 1 January 2020 on transactions carried out using the digital mode and advised them not to impose charges on future transactions carried out through such modes.
Hence, following the CBDT directives, SBI said that it has refunded the charges recovered in respect of all the digital transactions to the BSBD customers with effect from 1 January 2020 to 14 September 2020 and stopped levying charges on such transactions after 15 September 2020. 
The BSBD account offers certain basic banking facilities free of cost to the account-holders. The zero-balance account can be opened in any bank and there is no penalty for non-maintenance of a minimum balance in the zero-balance account. 
The public sector lender also reiterated that the Bank is focused on customers and the bank is working towards offering a convenient banking experience to all its diverse range of customers. 
Earlier, after a huge public outcry, the Bank had also waived fees levied on SMS services and on maintenance of monthly average balance to all its savings bank account-holders.
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