In 4 years, banks fined you more than Vijay Mallya and Nirav Modi owe them

Of course, you heard the name of Vijay Mallya. The liquor baron who once had a majority stake in United Beverages, the face of Kingfisher Airline and Royal Challengers Bangalore, and a host of other things? Aaah! Do you remember. Good.

Vijay Mallya owes about 9,000 crore to various Indian banks. He has defrauded them over the years and is now in the UK. India says it wants to deport and that efforts are being made.

You must also have heard of Nirav Modi. The diamond man who defrauded Indian banks for more than 11,300 crores of rupees?

But this is not an article about the fugitive billionaires of India. Forget them for a moment. This article is about you and your money.

In less than four years (April 2015 to September 2018), Indian banks earned at least 10,391.43 crore rupees by only charging you two things – non-compliance with the minimum balance. save accounts and make more than the authorized number of free ATM transactions per month

. This amount is higher than what Vijay Mallya owes and represents 92% of the amount due by Nirav Modi. Wait and catch your breath as this amount is the amount collected by public sector banks. It does not include the revenues of private banks by collecting fines.

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(The penalty for non-maintenance of the minimum balance is much higher in private banks than in public sector banks. For example, between 2015 and 2016 and 2017-18, the three Indian banks Axis Bank, HDFC Bank and ICICI Bank cashed Rs 4,054.77 by fineing their clients for not maintaining the minimum balance on their account. savings account, more on this later.)

This information was shared by the Ministry of Finance of the Union at Lok Sabha on December 21 in in response to a written question by Dibyendu Adhikari, Congressman of Trinamool.

But why should we compare the money owed by the frauds with the money that the banks have earned legally? Correct. We should not and we are not. It's just to give you an idea of ​​how much the banks are making by charging only two of their many services to their customers.

To better appreciate the size of this amount, let's take a different example. The amount earned by the banks in collecting these two fines is higher than the crore of 10,000 rupees approved by the central government Friday (December 28) for the first mission of India in space – Gaganyaan .

Read the big numbers

Good. So, now that you know we're talking big (really, really big) numbers, let's talk about it in detail.

The central government was asked whether public sector banks levy fees / fines on savings accounts that do not maintain a minimum balance and / or exceed the number of free ATM transactions allowed by the banks in question. a month.

In its response, the Department of Finance provided data on the gains made by each public sector bank from April 2015 to September 2018 by collecting fines for both of these defaults.

In calculating the income of each bank, we find that public sector banks earned only Rs.6,246.44 by charging clients for their inability to maintain a minimum balance on their savings account.

Meanwhile, the amount of the fine for making additional ATM transactions during this period was 4,144.99 rupees.

FINE COLLECTED BY TOP 5 PUBLIC BANKS

Bank	Amount
State Bank of India	Rs 4,447.75 crore
National Bank of Punjab	Central Bank of Punjab	of India	crore of 551.49 rupees
Bank of Baroda	crore of 510.34 crore
Canara Bank	of 503.35 crore

Source: Lok Sabha

Punjab Bank and Sindh Bank is the only bank in the public sector to receive no fine for non-maintenance of the minimum balance of savings accounts.

The State Bank of India (SBI), which owns the country's largest network and is India's largest lender, won the government's most revealed response (Rs 4,447.75, 43% of the total amount earned by all public banks) by imposing fines, according to the government's response.

Acting private banks, another answer in the Lok Sabha revealed that between April 2015 and March 2018, three private banks – Axis Bank, HDFC Bank and ICICI Bank – recorded a gain of Rs 4,054.77 billion by imposing a fine on customers for not maintaining the minimum balance.

(We did not include private bank revenues in our overall figure, as the data on fines collected the maintenance of the minimum balance during the current fiscal year (up to the end of the year). September) was not available, unlike public bank data, and Lok Sabha's response did not include revenues from these banks by imposing fines on customers for ATM transactions. additional automatic over the past four years.)

However, an badysis of the two government responses to Lok Sabha shows that the profits of the three private banks resulted in Fines imposed on clients for not maintaining the minimum balance are greater than the collective gains of 20 public sector banks (excluding the SBIs).

For example, between April 2015 and March 2018, private banks earned Rs 4,054.77 crore by collecting fines for non-maintenance of the minimum balance.

During the same period, public sector banks (excluding the SBI) earned 2,823.42 crore. For SBI, the gain was 2,433.87 crore rupees during this period.

Fine of private banks resulting from non-maintenance of minimum balance

Bank	Amount
Axis Bank	of 1,300.44 crore
] HDFC Bank	Crore of 1,757 , 90 rupees
ICICI Bank	Crore of 996.43 rupees
Total	Crore of 1945524 [CRU

Source: Lok Sabha [1945902] What are the guidelines of The RBI

This is not the first time that banks have been criticized for imposing fines on customers for non-compliance with their minimum balance or for carrying out additional transactions at the bank. ATM machine.

The banks defended themselves by arguing that they offer services to people and, like any other service provider, they also have the right to charge for their services.

Sending to the press agency Press Trust of India (PTI) on December 21, 2018, PK, general manager of SBI Gupta justified the charges levied by the banks. He added that the banks had invested a lot in the technological modernization of the system and that this modernization ensured the security of banks in the country.

"With substantial investments in infrastructure and technology, it becomes imperative for the bank to recover at least part of the price," he said.

To advise clients, he said the bank was asking them to use digital channels as much as possible "as ATM operations are becoming more expensive on a daily basis."

The circulars / guidelines of the Reserve Bank of India (RBI) authorize banks to determine for themselves the minimum balance that the savings account should keep and the amount of the fine to be collected for non-maintenance expenses.

With substantial investments in infrastructure and technology, it becomes It is imperative that the bank recovers at least part of the cost

– PK Gupta, general manager, SBI

Regarding ATM transactions, the RBI's guidelines indicate that banks should allow their bankers to sell their money. Each month, five customers make free transactions from ATMs at their bank. For six metropolitan cities – New Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bengaluru – the RBI has authorized three free ATM transactions from other banks, in addition to the five bank ATM transactions, [19659064] READ ALSO | Banking services are not free. Read on to find out what you pay for everything you pay

ATM transactions include both financial (withdrawal and wire transfer) and non-financial transactions (min declaration, pin change, request for balance, etc.).

The RBI provided basic savings. deposit accounts (BSBD) and accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) from the minimum balance clause. However, these accounts may be subject to a fine for additional ATM transactions.

(The BSBD and PMJDY accounts are savings accounts that can be processed to provide banking services to low-income groups.)

As already mentioned, the RBI has left it up to the banks to decide the minimum balance that a normal savings account should maintain, as well as the amount of the fine for non-maintenance.

RBI's guidelines, according to the government's response to Parliament, only say that the fine must be "reasonable" and "not be out of step with the average cost of providing these services" .

For ATM transactions, the RBI allows banks to decide how much they want to charge for each additional transaction, provided that the fine can not exceed Rs 20 per transaction.

Fees charged by certain banks

. Bank	Minimum Required Balance	Fine for Minimum Balance	Fine for Additional ATM Transactions
SBI	1,000 Rs-3,000	5 Rs 15	20
BoB	1,000 Rs 1,000	20,000 Rs 200		Rs 20 (financial) Rs 10 (non-financial)
HDFC	Rs 2 500 Rs 10,000	Rs 150 Rs 600		. 20 rupees (for finance) 8.50 rupees (for non-financial purposes)
ICICI	1,000 rupees-10,000	Gramin Accounts: 5% of deficit of the minimum balance [19659002] Other accounts: Rs 100 + 5% of deficit of the minimum balance	Rs 20 (for financial) Rs 8.50 (for non-financial)

amount of fine levied by banks

Fines imposed for non-maintenance of the minimum amount and additional ATM transactions are just two of the many types of fees charged by banks to customers . Other fees include annual ATM service fees, RTGS fees, NTFS fees, free SMS alerts, Internet banking fees, and more.

There is no fixed rate for these fees, which vary from bank to bank. .

While the majority of public sector banks experience losses due to the accumulation of non-performing badets (NPAs) accumulated over the years, do banks attempt to find at least one solution to cope with their operational costs by charging ordinary customers? 19659002] According to another written response from the central government to Lok Sabha, the non-performing badets of all public sector banks amounted to Rs 9.62.621 billion as of March 31, 2018.

March 31, 2014 and as of March 31, 2018, non-performing badets of public sector banks increased by 74 percent from 2.51 054 crore to 9.62,621 crore.

Infographic: Mukesh Rawat / IndiaToday

] So, instead of acting in due form to find ways to reduce their NPA and to make sure that the big companies pay back the loan that they have. they have contracted, do banks seek the money of ordinary citizens by charging them such charges as non-maintenance of the minimum balance and by carrying out additional transactions with an ATM to withdraw their own hard-earned money? ?

In 2014 and March 31, 2018, the non-performing badets of the public sector banks increased by 74%, from 2.51 054 crores to 9.62,621 crores.

Banks are not at the forefront of understanding and empathy that accounts that do not maintain the minimum amount are not held by millionaires, but by very ordinary people, many of whom would be positioned in the economy where the maintenance of the minimum balance is distant. right to collect fines because the law provides for it. But there remains an open question as to the relevance and justification of these charges levied on ordinary people when they are juxtaposed to piles of APN that the banks have failed to treat.

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