1. Penalty from accounts to partly fund Aadhaar linkage costs: SBI

Penalty from accounts to partly fund Aadhaar linkage costs: SBI

State Bank of India (SBI) expects to collect Rs 2,000 crore as penalty on savings bank accounts which have failed to maintain a minimum balance, a sum which may be used to partly cover the costs incurred on the linking of accounts with Aadhaar.

By: | New Delhi | Published: September 17, 2017 1:36 PM
SBI, Sbi Minimum Balance, SBI Penalty, SBI Savings Account, KYC, Bank Linking Aadhar, sbi Atm, Aadhar Linking, Jan Dhan Account From April 1, SBI made it mandatory for savings bank accounts in metropolitan cities to maintain Rs 5,000 as minimum balance, Rs 3,000 in urban areas, Rs 2,000 in semi-urban areas and Rs 1,000 in rural areas. (Reuters)

State Bank of India (SBI) expects to collect Rs 2,000 crore as penalty on savings bank accounts which have failed to maintain a minimum balance, a sum which may be used to partly cover the costs incurred on the linking of accounts with Aadhaar. The recent directive of the government to link all savings bank accounts with Aadhaar by December 31 was a “very costly affair” as lenders were already facing high costs in maintaining such accounts and complying with the KYC (know your customer) requirement, says SBI Managing Director Rajnish Kumar. To recover such costs, including the lender’s costs on ATMs and business correspondents, the bank expects to realise over Rs 2,000 crore in the current fiscal from account holders as penalty for failing to maintain minimum balance in their savings accounts, he said. “Maintaining savings bank accounts and complying with KYC requirement is not an easy task. Now the government has said that you have to link Aadhaar to each and every account by December 31. So I have to look at (SBI’s) 40 crore (savings bank) accounts and it is a very costly affair,” he told IANS.

According to the government’s mandate, all existing bank account holders will have to submit Aadhaar card numbers to banks by December 31 this year, failing which the accounts will become invalid. Kumar said that the process would add to the costs of banks as it involves a process and making changes in the IT-backend as well. “It (Aadhaar linking) is a costly affair because you have to contact the customer, you have to do the process, you have to make changes in IT. There are costs associated with savings bank accounts,” he said. The largest public lender said it also invests heavily in technology requirement to take care of the transactions made in the savings bank accounts. “For maintaining savings bank accounts, there are certain costs. We have to invest heavily in technology. Our cost on technology every year is very high and that is more to take care of the transactions in (savings) accounts,” he said. “The penalty realised, we will use it to recover our outgo on ATMs. On business correspondents (BCs) channel, SBI incurs a loss of more than Rs 400 crore. We are incurring a cost of almost Rs 2,000 crore on business correspondents channel and ATMs per year. At least we should be able to recover that (from the penalty),” he said.

From April 1, SBI made it mandatory for savings bank accounts in metropolitan cities to maintain Rs 5,000 as minimum balance, Rs 3,000 in urban areas, Rs 2,000 in semi-urban areas and Rs 1,000 in rural areas, failing which a penalty is levied. He said that the rest of the penalty realised would go to recover the bank’s other costs, including Aadhaar linking. According to an RTI query, SBI realised Rs 235.06 crore as penalty till June-end from more than 60 million savings bank accounts. “Out of 27 crore (270 million) savings bank accounts which are required to comply with the minimum balance requirement, there may be about 20 per cent accounts that have not maintained the balance. We have given them enough time and notice. These charges were applicable from April 1. Those who couldn’t comply, we recovered penalty in June,” he said. Kumar said that the bank is, however, thinking of exempting senior citizens’ and students’ accounts from such penalty. “There is some feedback from senior citizens and students but by and large customers have accepted this. Whether we do make exemption relating to income group, or senior citizens or students, is under deliberation. We are now doing some analysis and we will take a call,” he said.

In the normal course, review on such charges happens once in a year and is effective from April 1, but based on customer feedback, the review is expected earlier, the SBI MD said. “Review is expected earlier than 2018. Nothing is cast in iron. We will also take into account the competitive situation in the market,” he said. SBI has a total of 400 million savings bank accounts, out of which 130 million are Jan Dhan accounts and Basic Savings Bank Deposit (BSBD) accounts which are exempt from minimum balance requirement and no charges are recovered from these accounts.

  1. R
    Reader
    Sep 18, 2017 at 8:16 am
    UK’s Biometric ID Database was dismantled. Why the United Kingdom's biometrics-linked National Identi-ty Card project to create a centralized register of sensitive information about residents similar to Aadhaar was scrapped in 2010?? The reasons were the massive threat posed to the privacy of people, the possibility of a surveillance state, the dangers of maintaining such a huge centralized repository of personal information, and the purposes it could be used for, and the dangers of such a centralized database being hacked. The other reasons were the unreliability of such a large-scale biometric verification processes, and the ethics of using biometric identification.
    Reply
    1. R
      Reader
      Sep 18, 2017 at 8:16 am
      The US Social Security Number (SSN) card has no biometric details, no photograph, no physical description and no birth date. All it does is confirm that a particular number has been issued to a particular name. Instead, a driving license or state ID card is used as an identification for adults. The US government does not collect the biometric details of its own citizens.
      Reply
      1. R
        Reader
        Sep 18, 2017 at 8:15 am
        A centralized and inter-linked biometric database like Aadhaar will lead to profiling and self-censorship, endangering freedom. Personal data gathered under the Aadhaar program is prone to misuse and surveillance. A centralized and interlinked database can lead to commercial abuse. Aadhaar project has created a vulnerability to identi-ty fraud, even identi-ty theft. Easy harvesting of biometrics traits and publicly-available Aadhaar numbers increase the risk of impersonation, especially online and banking fraud. Centralized databases can be hacked. Biometrics can be cloned, copied and reused.
        Reply
        1. T
          T
          Sep 17, 2017 at 10:56 pm
          SBI management as it appears have decided to be Shailaja ofmodern India.This attempt is nothing but a daylight robbery.if there is any provision under law the Bank should be wound up for cheating customers
          Reply
          1. S
            Saroj Choudhury
            Sep 17, 2017 at 7:01 pm
            Have you really gone through the process to comment on the difficulty so vividly?? Or just showing your technical jargon vocabulary???
            Reply
            1. C
              Chandrasekaran Venkataraman
              Sep 17, 2017 at 6:46 pm
              The bank, nowadays, issue statements like a politician. Tomorrow, the bank might say, any increase in charges in SB accounts, will go towards maintenance of toilets in branch premises as the footfall of SB account holders is more !
              Reply
              1. S
                Satish
                Sep 17, 2017 at 6:41 pm
                SBI isn't going after stressed assets, but making innocent customers pay for not maintaining minimum balance. Now they are coming up with the aadhaar linkage excuse. If aadhaar is so costly, why have aadhaar at all. Not all people have cushy jobs or ry every month. Penalising us shows non application of mind to this ridiculous charge. The Government wants to finish off the middle class with whatever dignity is left.
                Reply
                1. N
                  Niraj
                  Sep 17, 2017 at 3:22 pm
                  This is a chor bank.It has abdicated it's responsibility as people's Bank to a pure Mahajan lender.Even then if you visit branch you are made to feel totally unwelcome. Everything is charged and even then the bank is crying about costs. Aadhar linkage is mandated by modi sarkar and here also they are weeping. Nobody in finance ministry to rein them in .Jai ho acchhe din.
                  Reply
                  1. s
                    sudipta_ghose
                    Sep 17, 2017 at 2:24 pm
                    They have even imposed penalty on pension accounts. Now because of this MAB, I cannot draw my full pension amount. The Central Government paying them a good amount for every transaction in pension accounts.
                    Reply
                    1. #
                      #AADHAARFAIL
                      Sep 17, 2017 at 2:19 pm
                      When your bank account gets looted via aadhaar pay, you will call 1947, wait for 3 hours to get connected, the call center folks will simply ask you to visit aadhaar enrollment center, waiting list being 3 months, you will bribe 1000 INR and get an appointment with aadhaar enrollment center to resolve aadhaar misuse, they will ask you to email help at uidai dot gov dot in, you will send 10 emails in 10 days and then get a generic mail, asking you to specify all your details including preferred condom b , etc, you will respond with all details, you will follow up for 3 more days, then you will get a generic FINAL response, "Please lock your bio-metrics in UIDAI , Jai Hind!", after that even if you send 100 emails you will NOT get any response. You lock your bio-metrics, the criminal go to an aadhaar enrollment center and unlock your bio-metrics using stolen fingerprint and keep on looting your hard earned money.
                      Reply
                      1. #
                        #AADHAARFAIL
                        Sep 17, 2017 at 2:18 pm
                        Link aadhaar with everything 2. Your aadhaar has been deactivated til you voluntarily give DNA and pay $100 as DNA extraction fees 3. Your aadhaar is deactivated till voluntarily sleep with aadhaar mongers and satisfy them completely 4. Your aadhaar is deactivated till you donate eye/kidney/liver/pancreas You will not be able to refuse once you link aadhaar with everything else, since once aadhaar gets deactivated your bank, mobile, internet, property, gas, electricity access will be blocked. Stop linking aadhaar with anything else now, apply Fevicol in both thumbs before you are forced to give fingerprint, without bio-metrics aadhaar ios just a piece of paper. Jai Hind.
                        Reply
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