Why Is SBI Deducting Money for PM Jeevan Jyoti Bima without Authorisation or Consent from Customers?
UPDATED at 10.20am on 16 November 2023 to reveal Rs342 deposited by cash by SBI in Reena's account.
 
State Bank of India (SBI) has unauthorisedly deducted Rs342 from a student account holder, even though its official position is that no insurance or investment service is mandatory to avail its banking services. Reena (name changed), who has a student account, discovered that Rs342 had been debited for the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), which is valid till May 2024, without obtaining her consent or even informing her of the deduction. 
 
An official from SBI, who does not want to be named, told Reena that the Bank receives a list from the government and then automatically debits the premium from these accounts for the PMJJBY scheme. At the same time, banks are reluctant to make any effort to formally sell the scheme to the underprivileged, who may be seriously interested in availing the scheme. 
 
Moneylife Foundation had made an effort to discuss with banks how to promote this scheme as a way for people to ensure the safety of their support staff – domestic help, drivers, security guards or anyone with a bank account—as a kind of safety net, but drew a blank. The Foundation was exploring the possibility of allowing an employer to pay for others (just as you can pay the mobile bill of a third party) with the benefits accruing only and exclusively to the policyholder. Instead of promoting such measures, public sector banks (PSBs), acting on government diktat, think nothing of expropriating depositors’ funds at will. 
 
The illegal and unilateral debit by SBI, which is India's largest bank, amounts to gouging of depositor funds; it is even worse that the Bank has taken it out of a student account since these youngsters are usually on a tight budget. Worse, the text messages sent by the Bank do not state the purpose for which the money was debited or provide any link or details to the policy that Reena ostensibly availed or its terms, conditions and benefits. This clearly violates how insurance policies can be sold and ought to be punished by the Insurance Regulatory & Development Authority of India (IRDAI). 
 
 
As regards this particular deduction, there is another issue. PMJJBY starts in June every year and remains valid till May next year. If SBI deducts Rs342 as a premium for PMJJBY in November, then the scheme would be valid only for seven to eight months and not the entire year – which means that even the full-year benefit is not available. 
 
 
When the issue was raised with SBI on X (Twitter), it gave a standard response. It says, "Kindly note that opting for insurance and other investments is purely voluntary and our branches provide the information for the benefit as well as awareness of our customers. We maintain a high standard of ethics while providing services to the customers and no transaction is done in the account of the customer without his/her consent. Also, note that any type of insurance or investment is not mandatory to avail any type of service from us."
 
Further, SBI says, "If you have come across any such instance, please register a complaint in this regard at this link crcf.sbi.co.in/ccf select raise complaint - others >> personal segment/individual customer // general banking>>operation of accounts>>disputed debit/credit transactions and mention brief details of the issue in the last column. Upon successful registration of the complaint, you will receive a complaint no. on your registered mobile no./email id. Our concerned team will look into this."
 
 
As expected, the only issue is that the link SBI shared does not work. Despite several attempts, the webpage keeps saying, "An error occurred. Please try again" and "A Technical error occurred. Please verify your account number. Unable to take your request now!"
 
 
 
So, the last alternative for the account-holder is to visit her home branch and fill out an application form to discontinue her PMJJBY subscription which she never even subscribed to. The Bank will stop the subscription, but it may take one week, two weeks or even months. There, however, is no word if she would receive back her money that has already been debited.  
 
PMJJBY, launched by the Union government, offers Rs2 lakh life insurance coverage for anyone between 18 and 50 years. It has a premium of Rs300 to Rs436 per year, and the bank automatically debits the premium from account-holders and transfers it to the insurance company. Unless opted out by the customer, the scheme is renewed every year with auto-debit from the bank account.
 
In case you are wondering if such auto debit for PMJJBY is happening for the first time, the answer is no. It has happened ever since the Union government launched the scheme and directed banks, especially PSBs, to enrol more and more account-holders for PMJJBY. 
 
A simple search on X reveals that SBI has been auto-deducting premiums for PMJJBY from bank accounts without even basic consent or information to account-holders, including students.
 
Here are a few tweets...
 
 
 
 
 

UPDATE:
An elated Reena informed Moneylife that on Monday, there was a credit of Rs342 in her bank account. However, the message she received says this money was 'deposited in cash by self' when she did not even visit her branch that day. This is the same amount SBI had deducted from her account for the PMJJBY scheme without her consent or authorisation.


 

Comments
jobby
5 months ago
At the same time, getting claims from these scheme is difficult. Banks do not show same enthusiasm at the time of claim. No information is given. Infact I had to raise a grievance with insurance company to receive the claim number, bank branch did nothing. I had to eventually raise complain with PG portal to know the status of my claim from the bank. In the end, my claim was rejected.
gautham.speed
5 months ago
CPGRAMS or PGPORTAL is the best way to complain and get resolution against the banks, especially the SBI types.
papubcs
5 months ago
Such a useless post, do some Research and explain the benifits to people. these schemes are the most affordable insurance schemes in India safeguarding families.. Don't spread such useless news as if Banks are cheating public.. every penny is being accounted and account statement clearly shows the reason of debit.. Be thank full to the government for providing such a scheme which has helped many families..
sucheta
Replied to papubcs comment 5 months ago
Please do not post comments without knowing facts... that is misleading to readers and we will reserve the right to withhold such posts. The article clearly explains what the issues are -- in fact this action does not pass the very basics of selling insurance!
jayanthivenk
5 months ago
My premium towards prime Minister accident insurance policy which was increased from rs 12 to 20 was being regularly debited from my account with a private bank with my consent.Last year SBI also suddenly decided on its own to deduct 20 rupees from my account with them,when I had never given such authorisation.I ended up paying Rs 40 in one year instead of 20.My emails to SBI elicited standard replies without resolving the issue.The insurer did not bother to even reply to my mail.Finally I gave up as the amount was small and I was up against the wall.Also it was the last year of my premium as I hit 70.
swaruproy976
5 months ago
This is not only SBI all banks are doing like this. This is the indirectly pressure from govt. Govt is giving target to psb and subsequently the target is being fulfilled by branch.
yerramr
5 months ago
SBI response is no surprise and its complaints portal just doesn't just work. As a pensioner of the SBI, I sought to change my password on MyHRMS portal and the password they sent had a symbol that just doesn't exist either in their virtual keyboard or normal computer keyboard. It actually gave a email address if there is any further issue and the email gets the identical response to the insurance complaint narrated above. They blame the customer for not being familiar with the technology!! But I am familiar and am able to guide a tech-based NBFC. Yet, the way SBI technology responds is ludicrous.
Krups!
5 months ago
Bank of Maharashtra also deducts without consent. Bhosarigaon branch. Complained to branch, they say it's compulsory for all. Then I asked them to show where it's written compulsory. They told me to write a letter to stop PMJJY. I got the money but the issue is not solved.

How can a bank withdraw money without consent?
ppindia18
5 months ago
Canara bank also debited the amount without my authorization. I have to visit their branch on the other side of the town to get it cancelled, what a big scam.
GOWRISHANKAR
5 months ago
The day banks promoted Insurance Subsidiaries headache for customers have increased manifold. Banks are under pressure to cross sell UNWANTED CHUTIYA products to customers whether they like it or not. Insurance Companies are under pressure to either SELL, MISS-SELL or CROSS SELL their decadent products by hook or crook. It is high time that the Consumers Forum punishes such mis-selling by Banks. We cant expect such punishments by the Bank/Insurance Ombudsman for obvious reasons. Who is the black sheep is the question.
tenkaraimohan
5 months ago
Thanks for bringing this issue to the public domain. This unfair practice is NOT restrcited to State Bank of India. Almost all the PSBs indulge in such practice just to reach their target. It is so nice of you to have thought about the drivers/servant maids who might not have information about these schemes. It is a good suggestion that the persons who employ them can remit the premimu and bring them under coverage with a good intention of helping them and their family.
suritd79
Replied to tenkaraimohan comment 5 months ago
In fact, there's a built-in set up to over see the implementation of several government schemes which aim at providing financial support to the underprivileged who cannot buy insurance policy at higher premium rates. Pmjjby is one important scheme to support family in the event of unfortunate death of the bread winner of the family. I'm a retired government primary school headmaster and thought of promoting the same amongst masses. But, unfortunately the response from the bank is not enthusiastic. They feel it an additional burden. The government needs to stand in support of volunteers who are willing to work for no financial gain. Thanks and regards
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