This is How Indian Government Looting The Money of Common People in the name of AMB

It was yesterday morning and the first text message that greeted me was from one of India’s leading private bank.

My bank account was in that leading bank and the SMS was,

“UPDATE: Balance in A/c XX1628 has gone below minimum limit of INR 5,000.00. Yesterday’s balance: …… Check A/c statements on the MobileBanking App”

Seeing the remaining amount, I thought that how the balance is so low?

Well, after login through net banking I found that it was a penalty amount called “Account Minimum Balance (AMB)” that the Indian banks, nowadays, are collecting from the common of India for the non-maintenance of minimum account balance.

However, the shocking part is that my money was deducted despite maintaining the minimum account balance in the first week of the month.

When enquired about it, the Bank said that the account holder needs to have an amount of Rs 3,00,000 lakhs (on AMB of 10000, so 10000*30days= 300000+GST) in his account on the first two days of the month necessarily, after that if he will spend no charges will be applied.

“It means a common man having salary of 30000 INR per month should avoid to pay the home rent and other expenses to maintain the balance of 10000 INR in all that 30 days of the month, else ready to face huge penalty.”

 

Now come to next question, Why this AMB charges?

Because the Indian bank has huge NPA’s (non-performing assets) (thanks to businessman and Indian political parties) and to fill these NPA’s, Govt and banks needed money.

Twenty-one public sector banks (PSBs) and three private sector banks have reportedly collected an enormous amount of Rs 5,000 crore from customers for not following the minimum balance criteria in their accounts in 2017-18.

Out of all the public sector banks, the State Bank of India stood at the top in terms of the amount collected which was Rs 2433 crore penalty. SBI earned nearly half of the total collection.

The minimum average balance requirement in SBI for its customers in metro cities is Rs 3,000. In case, the balance comes down between Rs 2,999 and Rs 1,500, then the bank charges Rs 30 as a penalty.

Furthermore, if it falls from Rs 1,499 to Rs 750, then the SBI charges Rs 40, and Rs 50 if the minimum account balance is below Rs 750.

Coming to the private sector, the highest earners of penalty include HDFC Bank, Axis Bank and ICICI Bank. Among these, HDFC remains at the top with Rs 590 crore collection, followed by a Rs 530 crore collection by Axis Bank. ICICI Bank, on the other hand, collected an amount of Rs 317 crore as penalty for the financial year 2017-18.

The fifth position was attained by Punjab National Bank (PNB) that collected a penalty amounting to Rs 211 crore. The minimum balance requirement for general savings account in PNB is Rs 500 for rural areas and Rs 1,000 for semi-urban areas.

Here we have the minimum account balance details and also the details regarding the penalty in case of non-maintenance of MAB:

 

 

BANK	MAB	PENALTY ON NON-MAINTENANCE OF MAB
SBI	Rs 3000	Up to Rs 15 per month
HDFC Bank	Rs 10000	Up to Rs 600
AXIS Bank	Rs 10000	Rs. 10 per Rs.100 of the shortfall or Rs. 500, (plus   GST) whichever is lower   with a minimum charge of   Rs.100
ICICI Bank	Rs 10000	Rs. 100 + 5% of the   shortfall in required MAB
PNB	Rs 2000	Up to Rs 250

 

 

Therefore, the top five banks on the basis of the amount collected from non-maintenance of minimum balance fee are:

 – State Bank of India

 – HDFC Bank

 – Axis Bank

 – ICICI Bank

 – Punjab National Bank

 

Earlier this year, SBI has brought down the non-maintenance charge by 75 percent. SBI earned Rs 1,771 crore in eight months by penalizing people for not maintaining the AMB, while its July-September quarter net profit was Rs 1,581.55 crore.

It has come as a shock for many citizens of the country where the majority population is poor and this can be a setback for most of them.  The government is collecting money on unnecessary terms from the public, instead of other necessary measures. For a long time, many banks have been facing criticism for their high charges and penalties.

In this case, the government has made a silly move. Instead of putting up penalties on various other important elements, it is penalizing the public for such a small issue. Not only the poor but also the salary earning people are getting affected by this.

The decrease in the revenue of banks has certainly led them to charge penalties from the general public and earn considerable income.

Earlier the banks used to receive a good amount in form of commission from the public from the issue of the draft, however, with the entry of NEFT and RTGS, the commission has been reduced to a great extent. If these fund transfer services would have charged the people with a greater commission, it would have been a good source of funds for the banking sector and also, there would have been no need of raising money through penalties like these.

However, under Basic Savings Bank Deposit (BSBD) scheme as well as Pradhan Mantri Jan Dhan Yojna, the customers are not required to maintain any minimum balance. Along with this, students up to 21 years of age are also free from maintaining any minimum balance. Also, the bank states that if an account holder doesn’t want to maintain the average monthly balance, then he can also get the regular savings bank account converted to the BSBD account free of charge.

It is an Irony that in a country like India where Avg basic income of people is 2000 INR per month need to maintain 10,000 INR balance in a month.

Its very painful to see that the middle class of India is suffering heavily due to this AMB charges and the current Indian Govt is not considered any correction in its decision.