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State Bank of India (SBI), on Thursday, clarified that it has stopped recovering charges in Basic Savings Bank Deposit Accounts (BSBDAs) on all digital transactions with effect from September 15, 2020, while retaining charges on cash withdrawals over and above four free withdrawals allowed per month.
Systematic breach
This clarification comes in the wake of Ashish Das, Professor, Department of Mathematics, IIT-Bombay, claiming in a recent report that there had been systematic breach in RBI regulations on BSBDAs by a few banks, most notably SBI, which hosts the maximum number of BSBDAs, by charging ₹17.70 for every debit transaction (even via digital means) beyond four a month.
“This imposition of service charges resulted in undue collections to the tune of over ₹300 crore from among nearly 12 crore BSBDA holders of SBI during the period 2015-20, of which, the period 2018-19 alone saw collection of ₹72 crore, and the period 2019-20, ₹158 crore,” Das alleged in the report, ‘Regulating Basic Savings Bank Deposit Accounts: Do We Need to Care for These Marginalised Depositors?’
SBI, in a statement, said the Reserve Bank of India, in August 2012, mandated that banks are free to levy reasonable charges in BSBD accounts beyond four free transactions. The availment of such additional services shall be at the option of the customers, it added.
Accordingly, SBI introduced charges for debit transactions beyond four free transactions in BSBD accounts with effect from June 15, 2016, with prior intimation to the customers.
India’s largest commercial bank observed that the Central Board of Direct Taxes (CBDT), in August 2020, advised banks to refund the charges collected, if any, on or after January 1, 2020, on transactions carried out using the digital mode and not to impose charges on future transactions carried out through such modes.
SBI emphasised that: “In terms of CBDT directives, SBI has refunded the charges recovered in respect of all the digital transactions to the BSBD customers with effect from January 1, 2020, to September 14, 2020.
“SBI has stopped recovering charges in such accounts on all digital transactions with effect from September 15, 2020, while retaining charges on cash withdrawals over and above four free withdrawals allowed per month,
The objective is also to encourage BSBD account holders, including PMJDY (Pradhan Mantri Jan Dhan Yojana) account holders, to adopt digital payment through the prescribed modes vis-à-vis the cash transactions, it added.
The bank said it has also waived fees levied on SMS services and on maintenance of monthly average balance to all its Savings Bank account holders.
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