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As Per RTI Reply, Central Bank Of India Earned Whopping 807 Crore As Penalty From Its Customers Due To Non-Maintenance Of Balance In Customers Bank Account

Shocking As Per RTI Reply, Central Bank Of India Earned 807 Crore As Penalty From Its Customers Due To Non-Maintenance Of Balance In Customers Bank Account

The staggering sum of 807 crores was collected by the central bank of India as a penalty for all clients with no balanced accounts, as was customary at the time. Even when the epidemic was at its worst, there were no changes in Charges. The fine should be cancelled if the situation has changed and the economy has improved. A lower-middle-class person who has a bank account at this bank cannot maintain the minimum balance during the epidemic, yet the bank is still charging them.

Central Bank Of India

It’s getting out of hand that millions of individuals were impacted by the economic crisis during the epidemic.

Following the RTI querry, things went awry when it was time to summarise specific data. As part of the central bank’s RTI reply, the central bank replied the RTI querry that the total charges collected by the bank during the period 2012-2021 due to non-balance was a whopping 807 crores.

A record was provided in response to the RTI request, and it showed that even during the pandemic year, the amount collected by the bank increased from 23.87 crores to 36.99 crores, from 54.08 crores to 55.59 crores, and from 2016 to 56.08 crore. The amount collected by the bank in 2012-2013 was 23.87 crore, in 2013-2014 from 36.99 crores to 36.99 crores, from 2014-2015 from 54.08 crores to 54.59 crores to 56.08 crores in 2016

According to the statistics, the bank collected more than 700 crores in charges over nine years from 2012 to 2021. Because they didn’t keep their accounts afloat, banks levied this fee. 

Because no one cares about the person sleeping on the street, individuals are being charged for various things in this manner. Everyone has their way of getting money and blaming others for it. A bank with fewer clients than SBI bank, Punjab national bank, and a host of others was the subject of this data set When it comes to giant banks, what about their interest rates? They’re charging for the same thing. They’ve turned fines into a way of making money, which amounts to a form of extortion.

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Banks are advised to tell clients of the requirement for a minimum savings bank account balance and the imposition of punitive penalties for failing to maintain it when the account is opened under the “Minimum Balance in Savings Bank Accounts” guidance.

Development and Regulation Policies’ proposes some actions to safeguard consumers. According to one of the recommendations made there, customers’ difficulties or lack of attention shouldn’t be used by banks.

It is preferable that banks limit the services available on ordinary savings bank accounts to those available on Basic Savings Bank Deposit Accounts and then restore services when the balances rise to the minimum required level, rather than charging penalties for failing to maintain the minimum balance.

To that end, we encourage bank customers to consult the Damodaran Committee’s guidelines on customer service in banking, which urge that banks notify customers through SMS, email, or letter if their account balance falls below a certain threshold. In addition, the penalties imposed should be proportional to the deficit found.

When investigated thoroughly, it is evident that banks should not take advantage of a person’s financial situation, yet they cling to a considerable number of costs.
People often forget the need to maintain a savings account’s minimum average balance (MAB). You must keep your account funded to the bare minimum to avoid fees.

How to compute MAB
The monthly average balance (MAB) is the sum of all month-end balances, and adding up each day’s end-of-day balance and dividing it by the month’s length yields the MAB.

EOD closing balances are added together to arrive at MAB (number of days in a month)

How to save yourself from paying penalty on non-maintenance of minimum  balance

How much of a fine will a person face?

Branches and banks have different MAB requirements, and the standard is often more excellent for urban and semi-urban branches than rural ones.

Rules for imposing penalties for failing to meet minimum balance requirements set out by the Reserve Bank of India
The bank shall explicitly inform the client through SMS, email, or letter that punitive charges would be applied if the minimum amount is not restored in the account within a month of the date of notification.

Disciplinary charges may be imposed if the minimum amount is not restored within a reasonable time, which shall not be less than one month from the date of notification of shortfall.
The Board of the bank may approve the bank’s policy on punitive charges.

If a shortage is found, penalties should be based on its severity. This means fees should be based on the agreed-upon minimum account balance plus a predetermined proportion of the difference between the actual and agreed-upon minimum balances. An appropriate slab construction for recouping costs is nearing completion.

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There has to be an assurance that such penalties are appropriate and follow the usual costs of delivering the services. To avoid a negative balance in the savings account, it must be assured that the minimum amount is maintained at all times.

Journalism student with a keen interest in Business world


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