SBI yields to protests; waives Rs500 account closure charges for all
Moneylife Digital Team 02 October 2017
Responding to strong protests by customers, expressed most vociferously in social media, State Bank of India (SBI) has decided to waive charges for closing savings bank account that are in existence for over six months. SBI, the country's largest bank, has been levying Rs500 plus service charges (about Rs573) for closing savings account, post merger of its associate banks with itself on 1 April 2017. Post GST, this went up to Rs590 as banking service attracts a tax of 18%. 
 
SBI has been levying account closure charges on all types of account, except for accounts that were closed within 14 days from opening. Last week, the state-run lender reduced its requirements for average monthly balance (AMB) in metros to Rs3,000 while deciding not to charge any penalty for non-maintenance of MAB for accounts of students and senior citizens. For non-maintenance of MAB, SBI has revised downward its charges ranging from 20% to 50% across all population groups and categories. The charges at semi-urban and rural centres range from Rs20 to Rs40 and at urban and metro centres from Rs30 to Rs50. The revised MAB requirement and charges will become applicable from October 2017. 
 
While SBI has levying penalty for non-maintenance of MAB from accounts holders, customers were finding it difficult to even close their accounts without paying Rs590 as charges. This was double whammy for those who were suffering at the hands of the public sector bank.
 
As Moneylife pointed out , SBI deducted chunks of diligently saved money of students from their accounts for not maintaining the MAB and advised the teacher to close such accounts by paying the account closure charges!
 
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.
 
In September 2017, even the staff of Reserve Bank of India (RBI) had raised issue of unfair charges levied by SBI, asking the regulator to wake 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
Yashvant Desai
5 years ago
The rate of interest paid on deposit is decided by the bank only. Depositors does not have any say. Like charges for all so called wrong doing [only by a few depositors] are decided by the banks and levied by system. There is no charges levied to bank for failure to provide promised services such as updation of passbook, timely collection of cheque deposited, providing required pay in slips etc. For passbook updation depositors has to visits branch of bank many time as the passbook printer is always out of order for many days in a year. I do not understand why standby another printer is not arranged. Required pre printed stationery such as pay in slips are always at short supply. Only depositers have to stand in queue for deposing / withdrawing their own money. Need to come together to address the step mother treatment given to depositers.
A BANERJEE
5 years ago
As a retired IRS officer, I am really confused about the attitude of the govt in this respect vis-a-vis its repeated declarations about the fight unto death against black money and corruption! If the banks are allowed to take such decisions with impunity, thus acting as positive disincentives against maintaining bank accounts, what then are the common, honest people going to do and what is the role of banks?
gvn rojarao
5 years ago
SBI CHAIRMAN BHATTACHARYA GARU DECREASING SBI GOODWILL, SHE ONLY PROFIT ORIENTED . EARLIER SBI CAPTION "PURE BANKING NOTHING ELSE" BUT THIS TIME CAPTION IS "EVERY INDIAN BANKING"
SuchindranathAiyerS
5 years ago
The Indian State has always cheated the non VIP citizen. The State Bank of India has simply earned it's first name
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