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

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Pointing out that the SBI had withdrawn it's clause for the penalty for not having minimum balance in May 2012 with the aim of widening its customer base, the statement underlines, "At that time many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

Breaking news? Top Hindu builder ties up with Muslim investor for a huge minority housing society in Ahmedabad

There is a flutter in Ahmedabad's Vejalpur area, derogatorily referred to as the "border" because, on its eastern side, there is a sprawling minority area called Juhapura, where around five lakh Muslims live. The segregation is so stark that virtually no Muslim lives in Vejalpur, populated by around four lakh Hindus, and no Hindu lives in Juhapura.

60 crore in Mahakumbh? It's all hype with an eye on UP polls, asserts keen BJP supporter in Amit Shah's constituency

As the Mahakumbh drew to a close, during my daily walk, I met a veteran BJP supporter—a neighbor with whom we would often share dinner in a group. An amicable person, the first thing he asked me, as he was about to take the lift to his flat, was, "How many people do you think must have participated in the holy dip?" He then stopped by to talk—which we did for a full half-hour, cutting into my walk time.

Caste, class, and Patidar agitation: Veteran academic 'unearths' Gujarat’s social history

Recently, I was talking with a veteran Gujarat-based academic who is the author of several books, including "Social Movements in India: A Review of Literature", "Untouchability in Rural India", "Public Health and Urban Development: The Study of Surat Plague", and "Dalit Identity and Politics", apart from many erudite articles and papers in research and popular journals.

A conman, a demolition man: How 'prominent' scribes are defending Pritish Nandy

How to defend Pritish Nandy? That’s the big question some of his so-called fans seem to ponder, especially amidst sharp criticism of his alleged insensitivity during his journalistic career. One such incident involved the theft and publication of the birth certificate of Masaba Gupta, daughter of actor Neena Gupta, in the Illustrated Weekly of India, which Nandy was editing at the time. He reportedly did this to uncover the identity of Masaba’s father.

An untold story? Still elusive: Gujarati language studies on social history of Gujarat's caste and class evolution

This is a follow-up to my earlier blog , where I mentioned that veteran scholar Prof. Ghanshyam Shah has just completed a book for publication on a topic no academic seems to have dealt with—caste and class relations in Gujarat’s social history. He forwarded me a chapter of the book, published as an "Economic & Political Weekly" article last year, which deals with the 2015 Patidar agitation in the context of how this now-powerful caste originated in the Middle Ages and how it has evolved in the post-independence era.

Behind the scene? Ex-IAS, now Modi man in Yogi Cabinet, who lined up Mahakumbh VVIP comforts for Gujarat colleagues

The other day, I was talking to a senior IAS official about whether he or his colleagues had traveled to the recently concluded Mahakumbh in Allahabad, which was renamed Prayagraj by UP Chief Minister Yogi Adityanath as part of his intense Hindutva drive. He refused to reveal any names but said he had not gone there "despite arrangements for Gujarat cadre IAS officials" at the Mahakumbh VVIP site. "The water is too dirty—why take the risk?" he asked.

New York-based digital company traces Modi's meteoric rise to global Hindutva ecosystem over several decades

A recent document, released by the Polis Project Inc.—a New York-based digital magazine and hybrid research and journalism organization—even as seeking to highlight the alleged rise of authoritarianism in India, has sought to trace Prime Minister Narendra Modi's meteoric rise since 2014 to the ever-expanding global Hindutva ecosystem over the last several decades.

Socialist utopia challenging feudal and Brahminical systems: Kanwal Bharti on Sant Raidas’ vision of Begumpura

In a controversial claim, well-known Dalit writer and columnist Kanwal Bharti has asserted that a clever Brahminical move appears to be behind the Guru Granth Sahib changing the name of the 15th-16th century mystic poet-saint of the Bhakti movement, Sant Raidas, to Sant Ravidas.

What's wrong with those seeking to promote Sanskrit? An ex-Hindi professor has the answer

Ajay Tiwari I have always wondered why certain elite sections are so fascinated by Sanskrit, to the extent of even practicing speaking a language that, for all practical purposes, isn’t alive. During my Times of India stint in Gandhinagar, the Gujarat state capital, I personally witnessed an IAS bureaucrat, Bhagyesh Jha, trying to converse with a friend in Sanskrit.

Search This Blog