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SBI: KIDS PENNILESS AFTER MINIMUM BALANCE RULE

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Lost in speed
SBI’s Rs 5000 average balance norm caused 100 students of Chembur school to lose their hard-saved cash, bank officials advise parents to close accounts.

A banking exercise, which was supposed to benefit the students of a municipal school in Chembur, has ended up causing them much distress with most of them losing all the money they had painstakingly saved in their accounts over two years, thanks to SBI’s latest monthly average balance rule.
The SBI, which has made it mandatory for all account-holders to maintain a minimum balance of Rs 5,000 every month, has made deductions as penalty from the accounts of around 100 students of the decades-old Ayodhya Nagar Municipal School.

Two years ago, around 200 students from classes VI to VIII were made to open bank accounts in SBI, Mahul Road branch, by the school so that they learnt the basics of banking and could directly have access to scholarship money.

Bibhishan Shinde, a teacher, who played a pivotal role in the banking drive, even taught the students to deposit as little as Rs 10 every week in their accounts to inculcate the habit of saving in them. Being a public sector bank, SBI was the preferred choice for the school, especially because it didn’t have a monthly minimum balance rule.

When Mumbai Mirror visited the SBI’s Mahul Road branch, a senior bank official said that a lot of customers had come to them with the same complaint. “We have got 3-4 complaints from this school so far. Parents can pay Rs 590 as per rules and close these accounts,” said BN Mishra, branch manager.

Source: Kids penniless after minimum balance rule - Mumbai Mirror -

Poor kids! :(
 

billubakra

Conversation Architect
When I was working in a private bank, there was a family whose savings and current account deposits were more than 10 crores. Once they were charged some non-maintenance charges. They came and told the manager to close all their accounts. The manager apologized, reversed the charges and later gifted them a champagne bottle worth Rs. 15k.
The other day I was in a bank, some guy wanted to withdraw around 1000 bucks. The madam said that you will be charged Rs. 150+GST since he had reached the withdrawal limit. He said he needs the money, so he has no choice.
 

whitestar_999

Super Moderator
Staff member
That family deserved a 15k champagne bottle if this story is true because even at conservative estimates the bank must have made at least 1 crore of profit from that account.

Banks are not charities & if they don't make profits then it is depositors money that loses its value.Anybody who is incapable of maintaining a min balance in their bank accounts should switch to jan dhan or basic savings acct.An interesting news btw:
HDFC Bank beats TCS in intra-day market cap - Times of India
At current valuation, HDFC Bank is worth more than all public sector banks put together...Public sector banks, which account for 70.6% of all bank deposits in the country and 66.2% of total bank credit, have a relatively smaller share of market capitalisation.
Maybe govt will decide to privatise all these public sector banks after accumulating a loss of lakhs of crores 5-10 years later just like it is doing now with Air India after accumulating a loss of almost 50000 crores.
 

Nerevarine

Incarnate
With the recent changes in SBI, i dont see any reason why i should still keep the SBI active. Its terrible service, my salary has bounced back twice because of bad service on their part.
I have an ICICI zero balance account, I have no idea how a private sector bank was able to provide zero balance to me while a govermment one cant ? Anyone know why ?
 

billubakra

Conversation Architect
That family deserved a 15k champagne bottle if this story is true because even at conservative estimates the bank must have made at least 1 crore of profit from that account.

Banks are not charities & if they don't make profits then it is depositors money that loses its value.Anybody who is incapable of maintaining a min balance in their bank accounts should switch to jan dhan or basic savings acct.An interesting news btw:
HDFC Bank beats TCS in intra-day market cap - Times of India

Maybe govt will decide to privatise all these public sector banks after accumulating a loss of lakhs of crores 5-10 years later just like it is doing now with Air India after accumulating a loss of almost 50000 crores.

This is not a story bro. Happened in front of me. That family owns like half of my city. They are the first family to own a Lambo in my state lol
I agree with your other points though. Private banks were also told to open Jan Dhan accounts but no one really cared about them as they are a burden to the bank and there was no government pressure. Moreover public sector banks are also reluctant in opening those accounts as they are just financial burden. Yea in the coming decades after wasting time and resources in merging public sector banks, government will have to privatize the banking sector also.
 

sohan_92

In the zone
With the recent changes in SBI, i dont see any reason why i should still keep the SBI active. Its terrible service, my salary has bounced back twice because of bad service on their part.
I have an ICICI zero balance account, I have no idea how a private sector bank was able to provide zero balance to me while a govermment one cant ? Anyone know why ?
Minimum balance maintaing in SBI is only for savings account, not for salary account. And I think most of the private banks do the same.

And regarding SBI customer service, I haven't faced any issues till now as most of the transactions I do are through net banking and mobile banking which are also hassle free.
 

whitestar_999

Super Moderator
Staff member
Pvt banks can open zero balance accounts because their regular saving accounts comes with a min required balance of Rs.10000 which subsidizes these loss making zero balance accounts & also they are relatively much less in numbers compared to their profit making savings accounts.However jan dhan accounts have many restrictions & is not suitable for a modern person doing most of the transactions online unless that person is a student.

@Nerevarine if you are having a salary/regular savings account in a bank then you can not open a jan dhan account because these accounts are meant for poor people availing govt benefit schemes & as per terms & conditions a person having a regular savings account is not eligible for jan dhan account.There are other types of zero balance accounts offered by various banks different from jan dhan accounts & these are basically used as a marketing tool to get new customers who would eventually move on to regular accounts after experiencing their services.
 
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Nerevarine

Incarnate
My original account was from State Bank of Mysore, a savings account. But with the recent merger with SBI, it has given me a a lot of problems. My intern salary was credited onto savings account, and because of this merger the IFSC code was changed 3 times without notifying me.. yes you heard it right, 3 times.

I ended up, making ICICI bank my primary account, surprisingly its a zero balance account as well. (They only provide zero balance to specific branches, from what the bank managed told me)
 

whitestar_999

Super Moderator
Staff member
ICICI bank has the best debit card facilities,it is the only bank I know whose debit cards were the first to work with paypal/international sites & in all these years have worked consistently with them(even axis & hdfc debit cards had some issues with paypal/international sites for a few months). Upgrade your account to a regular one(with min 10000/month requirement) whenever you start earning regularly.
 

Gauravs90

geek........
SBI also drained my 20 Rs :mrgreen: from my once student account. Now I cannot close the account as I cannot visit the Home Branch anymore.
 

whitestar_999

Super Moderator
Staff member
Just send them(email id of branch) a scan of the written self-signed application for closure of account from registered email id followed by sending of application by a courier to Branch Manager.
 
OP
Flash

Flash

Lost in speed
SBI also drained my 20 Rs :mrgreen: from my once student account. Now I cannot close the account as I cannot visit the Home Branch anymore.
Just send them(email id of branch) a scan of the written self-signed application for closure of account from registered email id followed by sending of application by a courier to Branch Manager.
Won't the accounts be closed automatically by Banks, after a certain period?
 

Gauravs90

geek........
Won't the accounts be closed automatically by Banks, after a certain period?
It's been dormant for 2 years now. I login to Internet Banking once in a year to check if everything is fine. I called customer care and they said I have to visit Home Branch to close it.
 

whitestar_999

Super Moderator
Staff member
Dormant accounts may be misused sometimes in financial fraud/laundering cases.As these accounts are KYC but not checked by their owners,some corrupt bank official can use such accounts for illegal parking of money for short duration(maybe even a few minutes or hours) before transferring the money to some other account as legit looking transaction.
 

theterminator

Wise Old Owl
That family deserved a 15k champagne bottle if this story is true because even at conservative estimates the bank must have made at least 1 crore of profit from that account.

Banks are not charities & if they don't make profits then it is depositors money that loses its value.Anybody who is incapable of maintaining a min balance in their bank accounts should switch to jan dhan or basic savings acct.An interesting news btw:
HDFC Bank beats TCS in intra-day market cap - Times of India

Maybe govt will decide to privatise all these public sector banks after accumulating a loss of lakhs of crores 5-10 years later just like it is doing now with Air India after accumulating a loss of almost 50000 crores.

But bank has been paying interest to that crorepatis. It will depend on branch profile like how much business the branch does to actually say for it.

Why psb's need to be privatised? The single reason for PSB's losses are those big corporates for which our govt is a broker. Also psb's suffer losses due to the social responsibility on them like opening of very less or even zero balance accounts. After Modi's Jan Dhan even a zero balance account holder demands all the facilities like ATMs, Cheque book, Passbook which incur costs.
Privatisation will also kill jobs.
 

theterminator

Wise Old Owl
With the recent changes in SBI, i dont see any reason why i should still keep the SBI active. Its terrible service, my salary has bounced back twice because of bad service on their part.
I have an ICICI zero balance account, I have no idea how a private sector bank was able to provide zero balance to me while a govermment one cant ? Anyone know why ?

How much did ICICI ask to open account? Was it NIL balance? It may have been a salary account where the bank expects only salary will be credited.
 

theterminator

Wise Old Owl
Just send them(email id of branch) a scan of the written self-signed application for closure of account from registered email id followed by sending of application by a courier to Branch Manager.

Some banks have the policy of not treating email as a valid mode of communication. So it may not work.
 
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