The State Bank of India on Wednesday defended its decision to charge customers if they do not maintain a minimum balance in their savings accounts. SBI Chairperson Arundhati Bhattacharya said the fee was introduced to balance the costs incurred from managing Jan Dhan accounts.
“We have 11 crore financial inclusion or Jan Dhan accounts. To manage such a large number, we need some charges. We considered many factors and after analysing carefully, we took this step,” Bhattacharya told reporters. The bank specified that the penalty would not apply to Jan Dhan accounts.
Moreover, SBI said it had not received any “formal communication” from the Centre requesting the bank to reconsider its decision, PTI reported. It said in a statement that SBI will come to a decision on the matter if it receives any such request.
On March 7, media reports had said the Centre had requested the bank to reconsider its decision to impose a penalty on accounts that have below the minimum required balance. The government had also reportedly asked SBI and other private sector banks to reconsider the penalty imposed on cash transactions and ATM withdrawals made above a specified limit.
Last week, SBI had announced a minimum balance penalty ranging from Rs 20 to Rs 100 for different areas – metropolitan, urban, semi-urban and rural. It had done away with this rule in 2012. The bank had also announced that it was hiking the minimum account balance requirement by nearly 10 times.
According to the new rules, which will be effective from April 1, the minimum balance is Rs 5,000 in the metro cities, Rs 3,000 in urban areas, Rs 2,000 in semi-urban areas and Rs 1,000 in rural areas. The rules will apply to account holders at SBI and its five associates – State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore. These five banks will merge with SBI on April 1.
On March 1, HDFC Bank, ICICI Bank and Axis Bank hiked cash transaction fees and limited free cash deposits and withdrawals to four in a month.