Indian banks "hit poor, help corporates" by imposing penalty for non-maintenance of minimum balance in accounts

By A Representative

In a sharply-worded statement, dozens of civil rights organizations and activists have taken strong exception to India's banks charging penalty for not maintaining a monthly average balance, saying it "directly affects the poor". Pointing out that the banks are doing it "because of their financial compulsions", it gives the example of how State Bank of India (SBI) is doing it despite its huge profits.
"SBI levied Rs 1,771 crores between April and November 2017 as charges from customers who did not maintain their minimum monthly average balance (MAB) in their accounts. SBI’s quarterly profit for the July-September quarter was Rs 1,586 crores. The fine was nearly half of the net profit between the period of April and September 2017, which was Rs 3,586 crores", the statement says, quoting a media report.
The statement says, "On one hand, the government is compelling citizens to open bank accounts and discouraging cash transactions and, on the other, its policies – often haphazard and detrimental to common people’s lives – are forcing banks to levy such charges to cope up with the costs of such policies. Linking of aadhaar-PAN with bank accounts is one such, after the disastrous demonetization."
Calling SBI managing-director Rajnish Kumar's defence in this context "disturbing", the statement quotes him as saying that SBI was planning to raise Rs 2,000 crores as a penalty for non-compliance of minimum balance which it intended to use partly for aadhaar-PAN linking, along with covering for other losses in banking operations.
According to the statement says, "The inordinate push for linking aadhaar to bank accounts, even while the Supreme Court is hearing the matter, shows the level of disregard this government has for law and our country’s legal institutions like Supreme Court."
It adds, "The financial burden of its arbitrary policies is passed on to the poor, working and middle-class customers, who are already burdened with the continuing impacts of decisions like demonetization", which "exemplifies how anti-people this government is."
Pointing out that the SBI had withdrawn it's clause for the penalty for not having minimum balance in May 2012 with the aim of widening its customer base, the statement underlines, "At that time many people shifted their accounts to SBI from the private banks as the private banks were levying a heavy charge for the minimum balance requirement."
However, it notes, "In April 2017, SBI reintroduced this penalty after Reserve Bank of India (RBI) permitted banks to levy charges if customers failed to comply with the minimum balance limit." Ever since then, it adds, the move has been criticized by a "wide spectrum of organizations" as it has been "largely considered an anti-people."
Insisting that the operational losses for banks as identified by Kumar are "marginal when we consider the losses incurred by the banks due to Non-Performing Assets (NPA)", the statement says, "Indian banks have been unable to keep a check on their rising NPAs. According to RBI, NPAs of Indian banks stood at Rs 7,11,312 crore at the end of March 2017, which jumped to Rs 8,29,338 crores by June 2017 and then further to Rs 8,36,782 crores by end of September 2017."
'"Instead of going tough on the defaulting corporate borrowers, public sector banks had wroteoff over Rs 55,000 crore of loans between April and September 2017", the statement says, adding, "It is highly unethical on the part of their part to extract a penalty from the financially weaker account holders for their inability to maintain a minimum balance, instead of recovering the loans given to the corporate customers."
Issued among others by All India Union of Forest Working People, Beyond Copenhagen Collective, Centre for Financial Accountability, Narmada Bachao Andolan, Amulya Nidhi of Nai Shuruwat, Ashok Shrimali of Mines, Minerals & People, Bharat Patel of the Machimar Adhikaar Sangharsh Sangathan (Kutch), Bilal Khan of the Ghar Bachao Ghar Banao Abhiyaan, and Himanshu Thakkar of the South Asia Network on Dams, Rivers & People, the statement demands the clause for the penalty due to non-maintenance of minimum be withdrawn.

Comments

From Kerala to Bangladesh: Lynching highlights deep social faultlines

By A Representative The recent incidents of mob lynching—one in Bangladesh involving a Hindu citizen and another in Kerala where a man was killed after being mistaken for a “Bangladeshi”—have sparked outrage and calls for accountability.

What Sister Nivedita understood about India that we have forgotten

By Harasankar Adhikari In the idea of a “Vikshit Bharat,” many real problems—hunger, poverty, ill health, unemployment, and joblessness—are increasingly overshadowed by the religious contest between Hindu and Muslim fundamentalisms. This contest is often sponsored and patronised by political parties across the spectrum, whether openly Hindutva-oriented, Islamist, partisan, or self-proclaimed secular.

When a city rebuilt forgets its builders: Migrant workers’ struggle for sanitation in Bhuj

Khasra Ground site By Aseem Mishra* Access to safe drinking water and sanitation is not a privilege—it is a fundamental human right. This principle has been unequivocally recognised by the United Nations and repeatedly affirmed by the Supreme Court of India as intrinsic to the right to life and dignity under Article 21 of the Constitution. Yet, for thousands of migrant workers living in Bhuj, this right remains elusive, exposing a troubling disconnect between constitutional guarantees, policy declarations, and lived reality.

Aravalli at the crossroads: Environment, democracy, and the crisis of justice

By Rajendra Singh* The functioning of the Ministry of Environment, Forests and Climate Change has undergone a troubling shift. Once mandated to safeguard forests and ecosystems, the Ministry now appears increasingly aligned with industrial interests. Its recent affidavit before the Supreme Court makes this drift unmistakably clear. An institution ostensibly created to protect the environment now seems to have strayed from that very purpose.

'Festive cheer fades': India’s housing market hits 17‑quarter slump, sales drop 16% in Q4 2025

By A Representative Housing sales across India’s nine major real estate markets fell to a 17‑quarter low in the October–December period of 2025, with overall absorption dropping 16% year‑on‑year to 98,019 units, according to NSE‑listed analytics firm PropEquity. This marks the weakest quarter since Q3 2021, despite the festive season that usually drives demand. On a sequential basis, sales slipped 2%, while new launches contracted by 4%.

'Structural sabotage': Concern over sector-limited job guarantee in new employment law

By A Representative The advocacy group Centre for Financial Accountability (CFA) has raised concerns over the passage of the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (VB–G RAM G), which was approved during the recently concluded session of Parliament amid protests by opposition members. The legislation is intended to replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

Safety, pay and job security drive Urban Company gig workers’ protest in Gurugram

By A Representative Gig and platform service workers associated with Urban Company have stepped up their protest against what they describe as exploitative and unsafe working conditions, submitting a detailed Memorandum of Demands at the company’s Udyog Vihar office in Gurugram. The action is being seen as part of a wider and growing wave of dissatisfaction among gig workers across India, many of whom have resorted to demonstrations, app log-outs and strikes in recent months to press for fair pay, job security and basic labour protections.

India’s universities lag global standards, pushing students overseas: NITI Aayog study

By Rajiv Shah A new Government of India study, Internationalisation of Higher Education in India: Prospects, Potential, and Policy Recommendations , prepared by NITI Aayog , regrets that India’s lag in this sector is the direct result of “several systemic challenges such as inadequate infrastructure to provide quality education and deliver world-class research, weak industry–academia collaboration, and outdated curricula.”

The rise of the civilizational state: Prof. Pratap Bhanu Mehta warns of new authoritarianism

By A Representative Noted political theorist and public intellectual Professor Pratap Bhanu Mehta delivered a poignant reflection on the changing nature of the Indian state today, warning that the rise of a "civilizational state" poses a significant threat to the foundations of modern democracy and individual freedom. Delivering the Achyut Yagnik Memorial Lecture titled "The Idea of Civilization: Poison or Cure?" at the Ahmedabad Management Association, Mehta argued that India is currently witnessing a self-conscious political project that seeks to redefine the state not as a product of a modern constitution, but as an instrument of an ancient, authentic civilization.

Search This Blog