Money & Banking
M Veerappa Moily, Chairman of Parliamentary Standing Committee on Finance, assures a discussion on ever-increasing bank charges
M Veerappa Moily, Chairman of the Standing Committee of Parliament on finance assured a group of activists that the issue of ever rising and unfair bank charges would be discussed in detail by the committee. The meeting, which included Mr Dinesh Trivedi (of the All India Trinamool Congress) and Mr TK Rangarajan (Communists Party of India-Marxist) was told how banks have begun to levy a series of unjustified and unconscionable charges on customers, which actually hurt poorer customers at a time when the government is working at financial inclusion, while rich customers with large deposits are not charged. They drew attention to the furore caused by State Bank of India (SBI) decision to charge Rs25 on every single cash withdrawal from SBI Buddy app through ATM.
 
The group, including well known NGOs, trade unions, finance editors and experts presented Mr Moily a 1,100 page print out of over 100,000 signatures to an online petition at Change.org protesting against discriminatory bank charges and demanding action.
 
The group also submitted a Memorandum with seven points and requested that these be addressed urgently. 
 
The meeting was coordinated by Mr Sanjay Nirupam, President, Mumbai Regional Congress Committee and former Member of Parliament. 
 
The Parliamentary Standing Committee on Finance was in Mumbai for meetings with banks, insurance companies and financial institutions on 12th and 13th May. 
 
The group told the Standing Committee that although the Reserve Bank of India requires bank charges to be reasonable, how it refuses to go into the reasonableness of charges and allows banks to operate as a cartel. Since consumers are a disaggregated lot, they are unable to fight back.
 
The group asked for the following key issues to be dealt with urgently. 
 
1. Ensure Digital Safety by converting RBI’s draft circular of August 2016 into a formal Master Circular, thereby limiting customer liability and shifting the onus of proving customer fault to banks. This is in line with international best practices.
 
2. Remove Average Minimum Balance Charges: If a customer’s balance is low, then the bank can downgrade the account to a Zero Balance or No-Frills Account (and reduce services like chequebook facilities etc.). It cannot levy a charge. This is in line with international practices.
 
3. Remove charge on cash transactions, or low value cheques, which discriminates against economically weaker bank customers and students. 
 
4. End Discrimination against old borrowers vis-à-vis New ones for Loans- where new customers are offered significantly lower interest even on floating rate loans.
 
5. Banks must be ordered to stop the discriminatory charge levied to reduce interest rate on floating rate loans. (There is no such charge or delay when interest rates increase).
 
6. Making NEFT (National Electronic Fund Transfer) transactions safe by capturing additional data such as name and branch details and have a robust redress process for inadvertent mistakes. 
 
7. Bank services must have a rational, transparent and non-discriminatory pricing framework for banks based on a detailed costing of all products and services
 
The group of activists who met the standing committee members: Sucheta Dalal, Trustee, Moneylife Foundation; AV Shenoy from the Rashtriya Matadata Manch; Ms Lalita Joshi and Mr Devidas Tuljapurkar, both Joint Secretaries of the All India Bank Employees Association (AIBEA); Harsh Vardhan Roongta, Financial Expert and Advisor; RN Bhaskar, Senior Editor and columnist; Dolphy D’souza, Convener, Police Reforms Watch; DS Ranga Rao, Public Concern for Governance Trust (PCGT); and Yogesh Sapkale, Director (Projects), Moneylife Foundation. Several leading unions and activists have signed and supported the Memorandum on bank charges. 
 

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COMMENTS

Sudharsan R

6 months ago

Pure heavy charges. Minimum balance charges even if we don't have money... Purely sucking public that too an average minimum balance of 500 and 1000 is reasonably OK but 3000 and 5000 is very high in public sector bank SBI

Ravindra Bhat

6 months ago

Hope things fall in place... And arrogance of these banks falls flat. Great initiative from money life...

Suketu Shah

6 months ago

PMO office(not MoF as of today) shd have moneylife advising them directly on suggestions on major changes required in financial/banking,etc sectors in India.Positive results wl be much faster to protect customers.

Mahesh S Bhatt

6 months ago

Good Great Show Money Life. But I donot know how much the will materialise?
Mahesh Bhatt

Jagdish Chavan

6 months ago

Great and timely efforts by MLF.

Simple Indian

6 months ago

A very good initiative taken by MLF. All the points mentioned for action / implementation are justified and will benefit millions of Bank customers who have been forced to put up with the whims n fancies of Banks all this while. Will be good if the concerned Govt Depts/RBI/Banks take note and implement the same at the earliest.

SRINIVAS SHENOY

6 months ago

With such a promising start and adequate backing, hope our objective of having reasonable charges levied, for all financial transactions, as per international practices by banks is met. Hope a vigorous follow up action of recovery of bad loans follows in a great way.

SRINIVAS SHENOY

6 months ago

With such a promising start and adequate backing, hope our objective of having reasonable charges levied, for all financial transactions, as per international practices by banks is met. Hope a vigorous follow up action of recovery of bad loans follows in a great way.

SRINIVAS SHENOY

6 months ago

With such a promising start and adequate backing, hope our objective of having reasonable charges levied, for all financial transactions, as per international practices by banks is met. Hope a vigorous follow up action of recovery of bad loans follows in a great way.

ksrao

6 months ago

At a time when the government is thinking of extensive use of digitisation for all financial transactions, banks' increasing and imposing charges is just anti-national.

ICICI Bank reduces home loan rates by 30 bps
Private sector lender ICICI Bank on Monday said that it has reduced interest rates by up to 30 basis points (bps) for home loans of up to Rs 30 lakh.
 
"With this reduction, salaried borrowers can avail home loans at among the lowest rates in the industry. Salaried women borrowers will get home loans at 8.35 per cent and others at 8.40 per cent," the private sector lender said in a statement. 
 
According to ICICI Bank, customers from economically weaker section (EWS) and low income group (LIG) can avail the dual benefit of low interest rates and credit linked subsidy under the Pradhan Mantri Awas Yojana.
 
Commenting on the initiative, ICICI Bank Managing Director and Chief Executive Officer Chanda Kochhar said: "ICICI Bank is committed to support the government's vision to provide housing for all by 2022. In line with this commitment, we have reduced the home loan interest rates for the affordable housing segment."
 
On May 8, the country's largest home loan provider State Bank of India (SBI) announced a reduction in the home loan rates by 25 bps from 8.60 per cent to 8.35 per cent per annum.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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All ATM withdrawals not chargeable, SBI clarifies after furore
Amid a public outcry in Kerala over a State Bank of India (SBI) announcement levying charges on ATM cash withdrawals from June 1, the largest public lender on Thursday clarified that the charge of Rs25 is applicable only for withdrawals from SBI Buddy through ATMs.
 
"Rs25 per transaction charge is applicable only for mobile wallet app SBI Buddy using ATM. This is applicable only for State Bank Buddy customers," the bank said here in a statement.
 
The clarification comes after the SBI in a notification indicated that all ATM withdrawals will be charged a fee of Rs25, which was later replaced with the corrected notification. 
 
The bank said that the number of free withdrawals from ATMs remained unchanged.
 
Jan-Dhan account holders with the SBI can avail of four free withdrawals in a month from ATMs.
 
Normal savings bank accounts holders will continue to get eight free ATM transactions (five from SBI ATMs plus three from other bank ATMs) in metros and 10 free transactions in non-metros (five from SBI ATMs plus five from other bank ATMs). 
 
Earlier in the day, Kerala Finance Minister Thomas Issac told the media that the only reason he could see for this "mad" new rule was that the SBI was faced with mounting non-performing assets (NPAs) to the tune of Rs 1.67 lakh crore.
 
"This is height of madness and irresponsibility. It would be interesting to find out the list of NPAs of the SBI... One wouldn't be surprised if the majority (of defaulters) are found to be corporates." 
 
"Just take a look at their (SBI) profits, it has dramatically come down. The charges have been levied to bring down their losses. This is something that even private sector banks would not dare think of doing," said Issac.
 
CPI-M's Lok Sabha member M.B. Rajesh said, "This is outrageous and the central government is cheating the people. Ever since the demonetisation began, the Centre has been bullying people. This is going to be taken up, both within and out of Parliament very strongly."
 
The move was also slammed by CPI-M Lok Sabha member M.B. Rajesh and popular film personality Shobi Thilakan, who called it an "anti-people policy of the Centre".
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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