Customer, not the King anymore at SBI

Banks preparing to milk customers for its inadequacies.

Debkumar Bhadra   |          Musings of an Islander       |          South Andaman

On 28 August 2014, the Prime Minister of India launched Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme for comprehensive financial inclusion by opening a bank account for every household. The goal was to ensure that every citizen has access to financial services namely Savings and Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner. In an email to Chairpersons of all PSU Banks the Prime Minister categorically stated that “bank account for each household was a national priority” and urged banks to gear up for the gigantic task. Response of the country men was such that a Guinness World Record was created by opening 1.5 Crore bank accounts on the inaugural day itself. But never did anyone imagine that banks would resort to milking the same customer, which hitherto was regarded as the King.
In the aftermath of demonetization of higher denomination notes, the citizens have been having a hard time withdrawing the required sum of money from banking channels, specifically ATM’s. Instances have been reported where customers had to return empty hand both from bank counters as well as ATM’s. To make things worse, the State Bank of India has revised the service charges translating to manifold increase in minimum balance required for maintaining a savings account from April 1st. Similarly the Monthly Average Balance (MAB) has been increased to as high as Rs 5000.oo for branches in six metro cities. As of now the MAB is Rs 500.oo for savings account without cheque facility and Rs 1000.oo with cheque book facility. The current upward revision is going to hit 31 crore savings account holders with SBI and its associate banks. Other banks are also expected to follow suit.

Here is the gist of all new charges that will come into effect from April 1st :

Account holders will have to maintain a specific Monthly Average Balance, failing which a fee upto Rs 100.oo plus Service tax will be levied.
For savings account three cash deposits will be free in a month beyond which an amount of Rs 50.oo plus Service Tax will be charged. For Current Account holders Cash Transaction Charges as high as Rs 20000.oo has been prescribed beyond free limit.
Withdrawal from ATM is restricted to five free transactions (three for other bank) in a month, beyond which an amount of Rs 20.oo will be charged from other bank and Rs 10.oo for withdrawals from SBI ATMs. However accounts which maintain a minimum balance of Rs 25000.oo (Rs 100000.oo for other banks) there will be no charge on ATM withdrawals.
SMS alerts will be charged at Rs 15.oo per quarter from debit card holders with MAB of Rs 25000.oo and below.


For a complete list of Revised Service Charges, readers are requested to contact their bank or take a look at this link.
The impetus that PMJDY has given to the banking system resulting in opening of 27 Crore bank accounts under the scheme is unparalleled. However the Banks, as per several media reports, have not been able to cope up with the emergent situation. Upward revision of service charges under such a circumstance is going to add to the resentment of the customers.

The situation has become such in some part of our islands that banks in some of the instance has not able to dispense cash to its customers over its counters. One can imagine the situation at ATM’s. Let me narrate my last week’s experience with the functioning of a typical SBI ATM. I visited my banks ATM at Bambooflat. Inserted the card and after entering the required fields came to know that the amount entered could not be dispensed since 500.oo and 2000.oo rupee notes were not there. I had to enter a lesser amount and after two withdrawals, could get only one-fourth of what I intended to withdraw in 100.oo rupee notes.

While I was gearing up for the third swipe in a row “Baki ke customers ke liye bhi kuch note rakhiye” (leave some notes for rest of the customers) quipped the customer in the queue behind me. Thus I had to contended with what I got after surrendering three attempts at my banks own ATM!

Had I withdrawn the required amount in Rs 100.oo notes that the ATM was dispensing, I would have ended up paying service charge for no fault on my part. The bank on the other hand, which is apparently at fault, stands to gain from the situation since I will have to visit the ATM again to meet my requirement of hard cash. In the process, I will have to pay service charges for repeated visit to the ATM.

As a customer, almost all of us islanders has shown tremendous patience all these days. But surprisingly when the daily restrictions has been removed by the RBI considering the fact that shortage of cash in the country has eased, bank ATM's dispensing only 100 rupee notes smell fishy. Earlier when the ATM's were dispensing only 2000 rupee notes, the banks failed to change them for 100.oo rupee note and now when the cash situation has improved, the ATM's are dispensing only 100.oo rupee notes causing inconvenience to the customers.

Under such a situation, the proposed levy of service charges not only seems ill timed, it is in-fact unprofessional on the part of the bank to resort to milk the customers by levy of service charges for its apparent inadequacy.


Thus on the occasion of International Womens Day, I appeal to the Chairperson Mrs Arundhati Bhattacharya to consider roll back of the proposed service charges and give its 31 Crore savings bank account holders the much needed respite from the April fool’s prank.

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