Business

Banks collect Rs 5,000 cr for breaching minimum balance norms

SBI leads the pack in penalising the customers in FY18

New Delhi: As many as 21 public sector banks and three major private sector lenders collected a whopping Rs5,000 crore from customers for non-maintenance of minimum balance in their accounts in 2017-18, according to banking data.

India’s largest lender State Bank of India, which suffered a staggering net loss of Rs 6,547 crore during 2017-18, led the pack in penalising its customers for not maintaining minimum account balance.

The government-owned SBI, which re-introduced the penalty on deposits going below monthly average balance basis from April 2017, collected nearly half the amount raised by the 24 banks put together (Rs4,989.55 crore). But for the additional income of Rs2,433.87 crore under this head, SBI’s losses would have soared further.

After SBI, the largest amount of charges for not maintaining minimum balance during 2017-18 was collected by HDFC Bank. It charged its customers Rs 590.84 crore, which is lower than Rs619.39 crore in 2016-17, the data revealed.

Axis Bank collected Rs 530.12 crore in the last fiscal while ICICI Bank charged Rs 317.6 crore. SBI was charging the penalty on failure to maintain monthly average balance requirement till 2012 and again re-introduced it from April 1, 2017.

SBI was charging the penalty on failure to maintain monthly average balance requirement till 2012 and again re-introduced it from April 1, 2017. Following the criticism, SBI reduced charges with effect from October 1, 2017.
Customers opening accounts under Basic Savings Bank Deposit (BSBD) scheme as well as Pradhan Mantri Jan Dhan Yojna are not required to maintain any minimum balance.

Meanwhile, SBI has entered into a pact with NHAI for a long-term unsecured loan to the tune of Rs 25,000 crore. This is SBI’s highest long-term unsecured loan to any entity and also the largest ever loan sanctioned to NHAI.
“NHAI is getting an unsecured loan of Rs 25,000 crore from SBI for 10 years with 3 years of moratorium on repayments. This is the largest amount of loan to have been sanctioned to NHAI in one stroke by any institution,” road transport minister said.

Customers opening accounts under Basic Savings Bank Deposit (BSBD) scheme as well as Pradhan Mantri Jan Dhan Yojna are not required to maintain any minimum balance.

Credit of banks jumps 12.44%, deposits up 8.15%

  • Bank credit grew by 12.44% to Rs 86,13,164 crore in the fortnight to July 20, according to the RBI data.
  • In the year-ago period, bank credit had stood at Rs76,59,898 crore.
  • Growth in advances during the reporting period was marginally lower than the increase registered in the fortnight to July 6, when loans increased by 12.78% to Rs86,60,069 crore.
  • During the reporting fortnight, deposits increased by 8.15% to Rs 1,14,38,121 crore from Rs 1,05,75,615 crore a year ago, according to the data.
  • Deposit the growth, the pace was slower than that in the last fortnight ended July 6, 2018, when they had risen 8.33% to Rs 1,14,85,768 crore.
  • In June 2018, the non-food bank credit rose 11.1% as against a rise of 4.8 per cent in the same month last year.
  • Loans to agriculture and allied activities slowed 6.5 per cent in June, compared to an increase of 7.5% in June.
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