Recently, the IIT Bombay revealed a study that several banks including SBI have been imposing extreme charges on certain services provided to poor persons having zero-balance or Basic Savings Bank Deposit Accounts(BSBDA).
What Did the Study Say?
The study stated that the decision of SBI to levy a charge of Rs 17.70 for every debit transaction beyond four by the account holders of BSBDA cannot be considered as “reasonable”. During 2015-20, the imposition of service charges resulted in the collection of Rs 300 crore from nearly 12 crores zero balance account holders of SBI. The study claimed, “Although not by intent, but in practice, RBI has allowed victimization of these BSBDA customers despite being duty-bound to protect them. Two of its specialized departments- the ‘Consumer Education and Protection Department’ and the ‘Financial Inclusion and Development Department’– allowed this to continue over years even though RBI regulations for ‘ensuring the reasonableness of service charges’ were in place”.
Charges Imposed on BSBDA
The levying of charges on BSBDA is as per the RBI regulations of September 2013. As per the regulation, in a month, these BSBDA account holders are allowed more than four withdrawals, at the discretion of the bank provided the bank does not charge for the same. The study said, “As long as the savings deposit account is a BSBDA, banks cannot impose any charge even for value-added banking services that a bank may like to offer at their discretion”.
TPT Policy Advocacy & Recommendations
- The RBI needs to ensure compliance with its regulations. The BSBDA accounts are not getting the proper treatment from the banks compared to the regular accounts when it comes to service charges on debit transactions.
- The government banks are getting benefitted to charge holders with the exorbitant fees. The banks also didn’t ensure reasonableness. Even, the high charges also apply to UPI transactions. As a result, the account holders are finding themselves in a difficult position.