SBI earns Rs 1772 cr in min balance penalty during April-Nov

  • SBI earns Rs 1772 cr in min balance penalty during April-Nov

SBI earns Rs 1772 cr in min balance penalty during April-Nov

SBI, however, didn't mention or deny the collection figures under minimum balance.

The amount collected from fines during the above period is more than the lender's net profit of Rs 1,581.55 during the July-September quarter this year, reported the Indian Express.

PSU banks have reportedly collected Rs 2320.96 crore in FY18 by imposing a penalty on customers who do not maintain their minimum monthly average balance (MAB).

Punjab and Sind Bank is the only state-owned lender which did not collect any charges during April-November and in 2016-17.

India's largest bank State Bank of India gave a new year gift for its 8 million borrowers with a sharp cut in lending interest rate by 30 basis points (bps) to 8.65 percent with effect from January 01, 2018.

It is also important to note that the reintroduction of the MAB breach charges coincided with the push from the Narendra Modi government to link Aadhaar to bank accounts, the previous deadline for which was December 31, 2017. This is same to those for metro city SBI customers. According to Reserve Bank of India, PSBs had written off Rs 2.28 lakh crore in bad loans in nine years to fiscal 2015-16. While the SBI reported a profit of Rs 3,031 crore for the June quarter, its gross NPAs rose to 9.97 per cent of gross advances in the same time, compared to 6.9 per cent in the March quarter.

Meanwhile, the SBI has also kept certain groups exempted from the restrictions of maintaining a minimum balance at the end of the month, including financial inclusion accounts, basic savings bank deposit accounts, small Accounts, Phela Kadam and Pheli Udaan accounts, minors till the age of 18 years, and all pensioners including recipients of social welfare benefits. Canara Bank managed to get Rs 62.16 crore.

Similarly, the penalty for non-maintenance of minimum balance in an account in metro category was Rs 50 for 50 percent shortfall, Rs 75 for shortfall between 50-75 percent and Rs 100 for 75 percent or more shortfall, according to the report.

Though the lender has retained its MCLR - or the marginal cost based lending rate - which is the new rate applicable to the borrowers since April 2016. The below categories of savings bank accounts are excluded from MAB norms. That the MAB penalty is also about bankrolling Aadhaar linkage, a project of uncertain future full of loopholes and awaiting a verdict in the Supreme Court, is telling.