Keep minimum balance of ₹3,000 or pay fine, says SBI

₹5k is too much for a bank like SBI? So would you close the account

  • Yes, I'm closing it. Too much for this terrible sarkari bank.

    Votes: 8 53.3%

  • No. I'm happy with them so I'll have a 5k in it.

    Votes: 7 46.7%
  • Total voters
    15
  • Poll closed .
rdst_1 said:
This is the root cause of all the issues. Smaller loans like Home loans, Car loans and even smaller personal loans are a lot safer. So the banks should let the big companies raise money from the market. People, even the small fish, who invest in the market, know of the risks when investing in such companies and the banks shouldn't be endangering common people's money by taking such unjustified risks.
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That is not only applicable for corporate loans like Mallya etc but also for a small business loans too. Example,
http://www.moneycontrol.com/news/bu...ans-improvesworsens-for-tractors_7998021.html

Assuming banks make only 4% on interest commissions and the tractor loan loss amounts to 1 lakh, then for this lose wipes away the profit made on 200 minimum balance accounts. So everything needs to be balanced.
Fact is every business has it's growth cycle - taking money from angel investors to VCs (if they can get any) to banks loans to public markets. Most cannot make the jump from angle investors to public markets directly.
 
Minimum balance maintenance rule was always there, my Sbi account in Kochi was closed ten years ago for the same reason as I didn't maintain Rs 1000 minimum balance, Rs 650 in my account was collected as fine over a period of six years and account was automatically closed.

If they're going to do the same to Jandhan accounts its pretty bad move from Sbi as it was promised to be a zero balance account.
 
drkrack said:
If they're going to do the same to Jandhan accounts its pretty bad move from Sbi as it was promised to be a zero balance account.
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JanDhan will be Zero-Balance as always according to SBI chief, That's why Finance ministry is quiet and is not saying anything. Let them say whatever they want, SBI is not up to standards to convince a customer to Maintain 5,000 average balance at all times.

I guess Rs 1,000 was enough, Like they had in 2012 before going for Zero Balance accounts.


 
All these silly excuses these bank directors are coming up with now, how do they get so much profit every year? Where do these costs go then? And these people are running a bank. They must have already calculated all the costs to the last rupee to see if they could get a profit before putting up ATM's and getting 3rd party cash vans to fill up their ATM's 2-3 times a day. If they didn't then its their fault. Their whole business plan is questionable. They should just shut down shop or let better people manage their stupid banks.
 
Time to leave India... Here we cant use and withdraw our own money the way we want. Then why should be earn? Chodi govt. should simply drop 40k packets in each house monthly. Then no need for banks or atms.
 
swatkats said:
^ Added a poll. Kindly vote.
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Lets put the poll into perspective - This is like deciding whether Paradise Biryani's increased cost makes it worth it not. While personal opinion might differ, it really doesn't matter. Paradise at it's discretion can see whether it wants to decrease it or not.

Also, someone in the thread earlier said, the MQB 10-12 years ago used to be 500. If we use the government figures for inflation, 500rs in 2007 is like ~1.3k today. And given people always complain that mehngai (inflation) has increased more than what government claims it to be, we can probably put this number near 2k? There was no info about fine amount but assuming it was 10 rs, today that is ~22rs and if it was 20rs then today it is ~45rs using government mehngai figures. If we go by popular public opinion of inflation, it will turn out to be even more. So what we are talking about is 1.5k in MQB for a fine of 25-50rs, using government official figures? This assuming bank wants to earn the same profit 10 years ago. I am sure people will be thrilled if their salaries grow just enough to keep with inflation ie if you joined as a fresher at 2.5 lakhs 10 years ago (I did), now you should earn 5.64 lakhs? Does that sound appealing? If not, why do people think banks should do the same?

Secondly, people keep claiming banks are just rolling in money from the money they have deposited in banks. Nothing is stopping them from finding out the truth. Most of the banks are public and their financial results can be pulled in a second. Google "bank name investor relations" and go to annual results, it is always a hefty document talking about everything the bank is doing and will be doing.

Banks have something called net interest margin in these reports which is ~ interest earned per 100 rs.
This figure can be found out from these docs. For SBI, it can be found here and it is not only dismal its going lower each day:
https://www.equitymaster.com/resear...p?symbol=sbi&name=SBI-Detailed-Financial-Data

They make ~2.8 rs per 100rs in interest with them.

Though comparisons are a revealing feature. When compared with the next best public bank ie PNB:
https://www.equitymaster.com/resear...ampaign=rightband&utm_content=compare-company

The NIM is a bit higher but the profits in PNB is negative and even in recent quarters doesn't come close and NPAs are super high. So there is a higher chance of PNB being bailed out using taxpayer money compared to SBI.

So is it that people would rather have everyone's taxes used for bailing out the banks than let it make some profit?

In comparison with the private bank (HDFC):
https://www.equitymaster.com/resear...ampaign=rightband&utm_content=compare-company

As the HDFC CEO said the differential amount they are making per rupee is around 4%, their NPAs are also low. But if you look at profit per employee HDFC makes nearly double than SBI.

The bigger problem is the heftiness of SBI. Why not privatize it and/or cut employees, lets see where does that take people, specially when their taxes are/where used for these banks.
 
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abhi1984 said:
Software. Why the sudden interest?
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Did you watch Safal Niveshak videos or did some accounting in college?

abhi1984 said:
The bigger problem is the heftiness of SBI. .....
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No. The biggest problem is all these banks giving out crores of loans to any Jack & Jill company and not being able to get even the interest of it back. Then they (both the Govt & these uselessly run banks) look at people like we are their ATM machines where they can take out money on some pretext or the other.
 
6pack said:
Did you watch Safal Niveshak videos or did some accounting in college?
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And what is Safal Niveshak? I have look that up. And no I dint do any accounting in college. I have already talked about where I am coming from:
abhi1984 said:
I have worked for couple of banks. One of these banks, we had a training for developers - "Fundamentals of banking" and the MAB/MQB question was one of the hotly debated question towards the end of the session.
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I am I still am curious about the relevancy of the question on what my profession actually is. Unless of course if TE is now an echo chamber in itself where the last resort has to question people instead of what views they present. I mean what better way to rubbish someone's view other than tagging them - bhakt, AAPtard, basic accountant etc.

So on that note, my last point on this thread which I forgot to make in the previous post (which doesn't require accounting knowledge). At 2% net interest margin, the 5k the interest amounts to 100 which is the highest fine. At 2.5k it is 50, and 1.25k is 25 so what SBI is asking for the metro one is exactly the interest they are expecting. So fine for 2.5k is 100-50 and 1.25k is 100-25 = 75. They could have put in fine percentage instead but my guess is that it will be too confusing for people hence the slabs.
 
abhi1984 said:
And what is Safal Niveshak? I have look that up. And no I dint do any accounting in college. I have already talked about where I am coming from:
I am I still am curious about the relevancy of the question on what my profession actually is. Unless of course if TE is now an echo chamber in itself where the last resort has to question people instead of what views they present. I mean what better way to rubbish someone's view other than tagging them - bhakt, AAPtard, basic accountant etc.

So on that note, my last point on this thread which I forgot to make in the previous post (which doesn't require accounting knowledge). At 2% net interest margin, the 5k the interest amounts to 100 which is the highest fine. At 2.5k it is 50, and 1.25k is 25 so what SBI is asking for the metro one is exactly the interest they are expecting. So fine for 2.5k is 100-50 and 1.25k is 100-25 = 75. They could have put in fine percentage instead but my guess is that it will be too confusing for people hence the slabs.
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Chill man, no one's pointing fingers at you. Lets say we were impressed by your knowledge. Such knowledge can only be gained if one had done some accounting course or learnt about reading a company's annual reports.
To answer your question, Safal Niveshak is a website that teaches new investors how to invest their money by reading such company annual reports (to find out PE ratio etc). They have a lot of videos on this company reports reading subject.
 
Look, we get it. Banks are a business, they have to make their profits yada yada yada...

But there are some of us who believe rather than pay banks for the privilege of keeping OUR money, we'd rather not !
 
6pack said:
Chill man, no one's pointing fingers at you. Lets say we were impressed by your knowledge. Such knowledge can only be gained if one had done some accounting course or learnt about reading a company's annual reports.
To answer your question, Safal Niveshak is a website that teaches new investors how to invest their money by reading such company annual reports (to find out PE ratio etc). They have a lot of videos on this company reports reading subject.
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My bad. It is always difficult for me to read intentions when conversing in written forms.
 
Julian said:
Look, we get it. Banks are a business, they have to make their profits yada yada yada...

But there are some of us who believe rather than pay banks for the privilege of keeping OUR money, we'd rather not !
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There is nothing stopping people from keeping their own money and I wasn't trying to convince keeping money with the banks was a great idea. The only point was - there is nothing wrong with this step from a banking perspective and rather one of the oldest play in the banking book.

Just to give perspective, SBI asks 5k while HDFC savings wants 10k. The charges for HDFC are - 150 to 600 which is way above the net interest margin of 4%. This compared to the puny 5 free cash transactions. Which is better? I would rather have SBI make some money and be a viable bank and still have public mandate in mind while operating.
 
The only issue in contention here is Aditya Puri's statement that banks are not free and we should pay him. Nobody ever said it was or expected it to be free. Now that they're increasing MABs even more, people are simply going to stop using the 'service'.
 
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