Penalty required to bear costs of Jan Dhan accounts, says SBI

India’s largest bank, the State Bank of India (SBI) is currently facing a lot of backlash for imposing penalty on customers for non-maintenance of minimum balance in their accounts. However, it has justified the penalties by saying that it’s needed to balance the "burden" of managing a large number of Jan Dhan accounts, which are opened with no frills, not even these penalties.

The bank also said that the government has not sent any "formal communication" for re-considering the penalty, and it will be reconsidered only if government says so.

It was only last week that SBI reintroduced these penalties along with revised rates on other banking services, to be charged from April 1.

"Today, we have lot of burden such as we have 11 crore financial inclusion or Jan Dhan accounts. To manage such a large number of Jan Dhan accounts, we need some charges. We have considered many factors and after analysing carefully, we have taken this step," SBI Chairman Arundhati Bhattacharya told reporters.

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Bhattacharya also said that all banks have minimum balance requirements and penalties, and comparatively, SBI has the lowest requirement. She added that only SBI had decided to withdraw the penalty in 2012.

(Image source: InsideIIM)