Criticising the latest Reserve Bank of India’s (RBI) annual Banking Ombudsman Report, which revealed dissatisfaction among 25 per cent customers, Financial Accountability Network (FAN India), has issued a public statement chiding RBI for being silent and not even issuing a guideline despite having evidence on how this policy is burdening the people.

The Network, which is a collective of civil society organisations, unions, people’s movements and concerned citizens from across the country, in no uncertain terms, demanded the immediate removal of all bank charges on the savings bank account. It further asked the RBI to make willful default a criminal offence; implement stringent recovery mechanisms for NPAs of large corporate loans; ensure that proper due-diligence is followed in lending to the big businesses.

Poor paying for Bank’s actions and Corporate Fraud
Dr Syeda Hameed, a former member of the erstwhile Planning Commission of India, said that by the policy of the bank charges, the burden of the non-performing assets created by the rich has fallen on the marginalised sections.

According to the data shared by the Ministry of Finance to the Parliament, in the financial year 2017-18, 21 public sector banks collected Rs 3490.49 crores just for the non-maintenance of the minimum balance and from April 2014-September 2018, the money earned as penalty by the 21 public sector and three private sector banks (AXIS, HDFC and ICICI) was Rs 12,388.56 crores. The joint statement emphasised that the cumulative amount of money earned by the banks from various service charges would be considerably higher. To support their statement, the Network quoted a Right to Information query in which the Bank of Baroda recently revealed that from between the financial year 2014-15 to FY 2017-18, it earned Rs 499.21 crores just on the ATM and SMS charges.

The Network, which is presently campaigning against bank charges, stressed that the students, labourers, hawkers, farmers, shopkeepers, homemakers, unemployed youth, urban poor, pensioners, and other marginalised sections are the worst affected by this policy. Many of the people whom the Network met during the campaign narrated how they lost their MGNREGA wages, scholarships, pensions, because of various bank charges. The statement cited cases of Rehan Tirmizi, a student at the Jamia Millia Islamia University, New Delhi, whose balance in the HDFC was pushed to minus Rs 4000, and Shanti Devi, a daily wage labourer from Muzaffarpur, Bihar, whose Rs 500, that she earned from MGNREGA work, was reduced to only Rs 60 due to the minimum balance policy.

Extending her support to the campaign, Shabnam Hashmi, social activist noted “Ambani and Adanis do not have a minimum balance in their bank accounts, poor; student; farmers; women etc. does! So people, who are already poor, are being fleeced. This is immoral and fraud. We demand that the bank charges be scrapped so that we can stop the poor becoming poorer.”

Various bank charges exist along with multiple types of premier bank accounts, with a higher minimum balance, on which banks offer exemption from the multiple charges. The statement noted that the consequence of this unfair policy is that the people who receive government subsidies, pensions or any welfare scheme of the government are those who are also forced to pay higher fines and charges.

“Banks, in the name of providing various banking services, are illegally and unnecessarily charging the common citizens. This is loot as it comes at the cost of the customers who cannot maintain a certain balance in the account,” said Medha Patkar, leader, National Alliance for Peoples’ Movements, in her support for the campaign against the bank charges.

Vijoo Krishnan, Central Committee Member of CPI-M, and Joint Secretary of the All India Kisan Sabha said that the bank charges as unacceptable and they must be immediately scrapped.

Various Charges Levied in the Name of Providing Services
In its statement, FAN India emphasised that the penalty for not maintaining minimum balance is only one of the multiple charges imposed by the banks for the basic banking services. It listed other charges, which include: cash deposits and withdrawals at bank branches; cash deposits in accounts other than one’s own; cash withdrawal from ATMs; issuance fee on debit cards; annual charge on debit cards; balance inquiry at ATMs; mini-statements from ATMs; regeneration of ATM pin code from branch; account closing charges; transaction declined with debit cards due to insufficient funds; SMS alerts that a customer gets from banks; change in address; change in mobile number; changes in KYC related documents; cash deposits at CDMs (Cash Deposit Machines); change of soiled/mutilated/old currency notes; NEFT and RTGS transfer of funds; surcharges on uses of debit cards for rail tickets, petrol/fuel/gas stations and payment of certain bills and government services; cheque books; demand draft; balance certificate; and signature verification.

Demanding that the policy of bank charges must be reviewed immediately, Dr Thomas Franco, a former general secretary of the All India Bank Officers Association asked, “if banks can have charges for the minimum balance, what prevents them from introducing one for the high-net-worth individuals, who have multiple and more complex relationships with the banks?”