The large bulk of bank account holders in this country comprises ordinary citizens. They are made to pay exorbitant banking charges via multiple and irresponsible ways. The revelation this past week that major banks have collected penalties totalling nearly Rs 5,000 crore during the 2017-18 fiscal for customers not maintaining the ‘minimum balance’ in their accounts is shocking, indeed. That shock has been amplified further by hints that this was done to also make up for the losses they incurred by way of bad loans – loans taken mostly by business sharks, who wilfully defaulted in repayments even as they have capacity to do so.
Indian banking system is taking major hits in recent years due to the abject failure on the part of the Reserve Bank of India (RBI) to keep a close tab on their wayward style of sanctioning loans without ensuring sufficient guarantees for repayments. In several of these
cases, pressure from ruling political classes including from the finance ministry had forced top banking functionaries to dilute the provisions for extension of such loans. Taking advantage of this season of permissiveness, banking officials themselves have mismanaged matters in ways to benefit their near and dear ones, or those who were willing to grease their palms. Instances are many, and cases of such mismanagement relating to banks like the public sector Punjab National Bank (PNB) as also the private sector Axis Bank and ICICI Bank are now common knowledge.
Banks now seem to be on a mission to rob the ordinary citizens by enforcing fines and service charges at excessive levels to make up for their omissions and commissions. Heavy charges in advancement of loans, unreasonably high service charges of other
kinds, including on ATM withdrawals, and several other cuts off and on by banks on various counts are happening much to the distress of the customers. RBI is not doing its job of redressing the grievances of customers, though it admittedly had advised banks to reduce the rate of fines vis-à-vis failure to maintain ‘minimum balance’ in the accounts. Notably, complaints are also that the public sector banks including the lead bank, SBI are outwitting private banks in the matter of “fleecing” the customers.
The NDA government led by Prime Minister Narendra Modi has not been of much help in streamlining the functioning of the banking sector. Scams involving the diamond merchant Nirav Modi have further dented the faith of the general public in the efficacy of banking institutions. Banking customers in India deserve a better deal.