Banks have collected Rs 19,000 crore in the last three years from account holders who failed to maintain the minimum account balance, said Raghav Chadha while raising the issue during the budget session of Parliament on Tuesday.
The Aam Aadmi Party MP also proposed that such penalties should be removed, saying poor people get punished and it discourages savings.
Chadha highlighted the scale of the problem using government data. “No bank charges for not maintaining the minimum account balance. Just a few days ago, the government responded in the Lok Sabha saying that in the last three financial years, 22-23, 23-24, 24-25, banks have collected a total of 19,000 crore rupees in minimum balance penalties,” he said.
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Speaking about the impact on low-income account holders, Chadha said, “This is a recovery from the bank account holder. This is the smallest and poorest bank account holder. Their 'crime' was that they didn't maintain the minimum account balance.”
The AAP MP also gave an example of how a small emergency can reduce a depositor's balance, stating, “He (the poor) saves up for weeks and months to put aside six thousand rupees. He opens a bank account, gathering up all his courage, and deposits those six thousand rupees. Then one day, after a few months, when disaster strikes and someone in his family gets sick, he uses two thousand out of those six thousand rupees.”
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“With just 100 rupees a month, the bank has taken 600 rupees over the last 6 months. Now, instead of giving him 4000 rupees, the bank only gives him 3400. just think about how important those 600 rupees are for that poor guy, and the state of the banks is such that they keep charging these fees again and again. We are subscribing and setting up a banking system,” Chadha explained.
He criticised the system for targeting poor people and emphasised financial inclusion. “This system has been set up in a way that punishes poverty. If we want more people to be part of the banking system, financial inclusion, we need to promote savings,” Chadha said.
He also highlighted rural banking challenges, saying, “and in rural branches, you have to keep between one to three thousand rupees, because of which banks charge a fee ranging from 50 to 600 rupees, and on that charge, they also collect 18% GST.”
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Stating that banks are making life hard for poor people, Chadha said, "Today, poor people are getting poorer. In the end, I just want to say to the government: please waive off the penalty for minimum account balance. Just like we waive off farmers' loans, bank charges and MAB penalties should be removed. Let's financially include the poor in this country.”
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