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Pointing out that the SBI had withdrawn it's clause for the penalty for not having minimum balance in May 2012 with the aim of widening its customer base, the statement underlines, "At that time many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 plagiarism to proxy exams: Galgotias and systemic failure in education

By Sandeep Pandey* Shock is being expressed at Galgotias University being found presenting a Chinese-made robotic dog and a South Korean-made soccer-playing drone as its own creations at the recently held India AI Impact Summit 2026, a global event in New Delhi. Earlier, a UGC-listed journal had published a paper from the university titled “Corona Virus Killed by Sound Vibrations Produced by Thali or Ghanti: A Potential Hypothesis,” which became the subject of widespread ridicule. Following the robotic dog controversy coming to light, the university has withdrawn the paper. These incidents are symptoms of deeper problems afflicting the Indian education system in general. Galgotias merely bit off more than it could chew.

The 'glass cliff' at Galgotias: How a university’s AI crisis became a gendered blame game

By Mohd. Ziyaullah Khan* “She was not aware of the technical origins of the product and in her enthusiasm of being on camera, gave factually incorrect information.” These were the words used in the official press release by Galgotias University following the controversy at the AI Impact Summit in Delhi. The statement came across as defensive, petty, and deeply insensitive.

Farewell to Saleem Samad: A life devoted to fearless journalism

By Nava Thakuria* Heartbreaking news arrived from Dhaka as the vibrant city lost one of its most active and committed citizens with the passing of journalist, author and progressive Bangladeshi national Saleem Samad. A gentleman who always had issues to discuss with anyone, anywhere and at any time, he passed away on 22 February 2026 while undergoing cancer treatment at Dhaka Medical College Hospital. He was 74.

From ancient wisdom to modern nationhood: The Indian story

By Syed Osman Sher South of the Himalayas lies a triangular stretch of land, spreading about 2,000 miles in each direction—a world of rare magic. It has fired the imagination of wanderers, settlers, raiders, traders, conquerors, and colonizers. They entered this country bringing with them new ethnicities, cultures, customs, religions, and languages.

Conversion laws and national identity: A Jesuit response response to the Hindutva narrative

By Rajiv Shah A recent book, " Luminous Footprints: The Christian Impact on India ", authored by two Jesuit scholars, Dr. Lancy Lobo and Dr. Denzil Fernandes , seeks to counter the current dominant narrative on Indian Christians , which equates evangelisation with conversion, and education, health and the social services provided by Christians as meant to lure -- even force -- vulnerable sections into Christianity.

Sergei Vasilyevich Gerasimov, the artist who survived Stalin's cultural purges

By Harsh Thakor* Sergei Vasilyevich Gerasimov (September 14, 1885 – April 20, 1964) was a Soviet artist, professor, academician, and teacher. His work was posthumously awarded the Lenin Prize, the highest artistic honour of the USSR. His paintings traced the development of socialist realism in the visual arts while retaining qualities drawn from impressionism. Gerasimov reconciled a lyrical approach to nature with the demands of Soviet socialist ideology.

Thali, COVID and academic credibility: All about the 2020 'pseudoscientific' Galgotias paper

By Jag Jivan* The first page image of the paper "Corona Virus Killed by Sound Vibrations Produced by Thali or Ghanti: A Potential Hypothesis" published in the Journal of Molecular Pharmaceuticals and Regulatory Affairs , Vol. 2, Issue 2 (2020), has gone viral on social media in the wake of the controversy surrounding a Chinese robot presented by the Galgotias University as its original product at the just-concluded AI summit in Delhi . The resurfacing of the 2020 publication, authored by Dharmendra Kumar , Galgotias University, has reignited debate over academic standards and scientific credibility.

Development at what cost? The budget's blind spot for the environment

By Raj Kumar Sinha* The historical ills in the relationship between capital and the environment have now manifested in areas commonly referred to as the "environmental crisis." This includes global warming, the destruction of the ozone layer, the devastation of tropical forests, mass mortality of fish, species extinction, loss of biodiversity, poison seeping into the atmosphere and food, desertification, shrinking water supplies, lack of clean water, and radioactive pollution.

Public money, private profits: Crop insurance scheme as goldmine for corporates

By Vikas Meshram The farmer in India is not merely a food provider; he is the soul of the nation. For centuries, enduring natural calamities and bearing debt generation after generation while remaining loyal to the soil, this community now finds itself trapped in a different kind of crisis. In February 2016, the Modi government launched the Pradhan Mantri Fasal Bima Yojana (PMFBY) with the stated objective of freeing farmers from the shackles of debt. It was an ambitious attempt to provide a strong safety net to cultivators repeatedly devastated by excessive rainfall, drought, and hailstorms.

Search This Blog