Minimum-Balance-Charges saves SBI from losses: Concept needs to be abolished

It refers to interesting but damaging news-item that country’s largest public-sector State Bank of India (SBI) earned as much as rupees 1771 crores during the half-yearly period of April-November 2017 through Minimum-Balance-Charges in accounts as against total profit of rupees 1581.55 crores during the same period. Data puts a big question-mark on working of the bank where losses would have outweighed the profits in case the bank would not have raised minimum-balance-requirements.

At a time when central government is advocating for opening zero-balance accounts under Pradhan Mantri Jan Dhan Yojna for encouraging cashless transactions, Reserve Bank of India (RBI) and central government should ask banks to abolish minimum-balance-requirements in all types of bank-accounts. Otherwise also, banks largely compensate expenses on maintaining accounts without minimum-balance-requirements because of paying very low interest-rates in savings-accounts with no interest payable in current accounts.

However in case minimum-balance-requirement is not abolished, then these and other charges should be uniform for all banks at least for those in public-sector. It is ridiculous that SBI topped in minimum-balance-requirement of rupees 5000 which still remains the highest even after being lowered to rupees 3000.


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