SBI Waives Closure Charges For Savings Accounts That Are Over Six Months Old
The country’s largest bank, State Bank of India (SBI) has decided to waive charges for closing savings bank account that are in existence for over six months. This came as a response to strong protests by customers expressed most vociferously on social media.
As per the report by Money Life, SBI has been levying Rs 500 plus service charges approximately for closing savings account, post-merger of its associate banks with itself on 1 April 2017. After the Goods and Services Tax (GST), this went up to Rs 590 as banking service attracts a tax of 18%.
Except for accounts that were closed within 14 days from opening, SBI has been imposing account closure charges on all types of accounts. Last week, the state-run lender reduced its requirements for Average Monthly Balance (MAB) in metros to Rs 3,000 while deciding not to charge any penalty for non-maintenance of MAB for accounts of senior citizens and students.
For non-maintenance of MAB, the bank has revised downward its charges at semi-urban and rural centres ranging from Rs 20 to Rs 40 and at urban and metro centres from Rs 30 to Rs 50. The revised MAB requirement and charges became applicable from October this year.
SBI deducted chunks of diligently saved money of students from their accounts for not maintaining the MAB and advised teachers to close such accounts by paying the closure charges.
An online petition that was launched by Moneylife Foundation garnered more than two lakh signatures. One of the major elements of this petition is about unreasonable and unfair bank charges.
Moneylife Foundation is a non-profit organisation registered with the Charity Commissioner of Mumbai. The Foundation is engaged in spreading financial literacy, consumer awareness and advocacy and works towards safe and fair market practices through workshops, round-table meetings, white papers, research, awareness campaigns, grievance redressal, counselling, etc.
The petition says, “Frequent increase in charges and billing customers by stealth through opt-out clauses that are not noticeable must be stopped immediately. For example; HDFC Bank started levying fees for an invite-only program, which unethically assumes that the customer is already in and willing to pay for it. The levy is stopped only when the consumer notices it and calls the bank to protest; this too is not an easy process.”
The staff of Reserve Bank of India (RBI) in September had also raised an issue of inequitable charges imposed by SBI and asked the regulator to wake up to take necessary action against such practices.
Earlier on May 12, a group, including well-known NGOs, trade unions, finance editors and experts, presented a 1,100-page printout of over 100,000 signatures to an online petition at Change.org to Chairman of Parliamentary Standing Committee on Finance, M Veerappa Moily.
State Bank of India has a network of about 24,000 branches and more than 40 crore customers of which 31 crore have savings bank accounts.