Fine for non-maintenance of minimum balance is just organised loot: MP

A Lok Sabha MP on Friday asked the government and the RBI to strictly direct banks to scrap their plan to levy a penalty on non-maintenance of minimum balance in accounts from April 1, terming it an "organised loot".

Raising the issue during Zero Hour, K C Venugopal (Cong) said the SBI and other banks have taken a "unilateral decision" to levy the penalties and have found "a new way to loot" the people.

"Government and the RBI must give strict direction to banks to avoid this organised loot," Venugopal said.

The Reserve Bank has permitted banks to levy charges for breaching the minimum balance limit.

As per the list of revised charges of SBI, the failure to maintain Monthly Average Balance (MAB) in accounts will attract a penalty of up to Rs 100 plus service tax.

In metropolitan areas, there will be a charge of Rs 100 plus service tax if the balance falls below 75 per cent of the MAB of Rs 5,000. If the shortfall is 50 per cent or less of the MAB, then the bank will charge Rs 50 plus service tax.

The charges and MAB varies according to the location of bank. It is minimum in the case of rural branches.

Venugopal said although the government has asked the banks not to impose such charges but the banks are going ahead with the move from April 1.

Raising the issue of disinvestment of Cochin Shipyard in the Lower House, N K Premachandran (RSP) demanded that the government should "withdraw" the plan in view of the workers' strike.

The government is planning to launch an Initial Public Offering (IPO) in Cochin Shipyard.