How Minimum Balance Penalties Deepen the Cost of Living Crisis in Modi’s India
Despite promises of leniency, public sector banks continue to extract money from the poor through minimum balance penalties, highlighting the Modi government's failure to protect vulnerable citizens amidst rising inflation and unemployment.
PSBs alone collected around ₹8,500 crore in penalties between FY20 and FY24, despite promises of leniency.
Imagine this: you are living a miserable life, struggling to make ends meet. You have just ₹1,000 left in your bank account—money you carefully set aside to feed yourself for the next four or five days. Suddenly, you receive an SMS notification that your account balance is now ₹-1,200. How did this happen? Your bank deducted two months’ worth of penalties for not maintaining the minimum balance. The money you desperately needed to survive was taken, and now you’re left with nothing.
This is not just a hypothetical scenario; it’s the harsh reality for many Indians today. Our beloved Prime Minister Narendra Modi and his policies are making life unbearable for the country’s poor. Between 2018 and 2023, public sector and major private banks collected a staggering ₹35,587.68 crore in penalties for not maintaining minimum balances, conducting additional ATM transactions, and using SMS services, according to the government’s own admission in the Rajya Sabha.
The irony is that even as the State Bank of India, the country’s largest lender, waived penalties for non-maintenance of minimum average balances (MAB) in 2020, other public sector banks (PSBs) continued to profit from the poor. PSBs alone collected around ₹8,500 crore in penalties between FY20 and FY24, despite promises of leniency.
Policy or Legalized Extortion
What does this mean for the average Indian? These penalties are nothing short of legalized extortion. In a country where the poor are already struggling with skyrocketing inflation, rising petrol prices, and a lack of job opportunities due to the Modi government’s privatization policies, the burden of maintaining a minimum balance in a savings account is the last thing they need.
Starting from the demonetization debacle to the sudden lockdown during the pandemic, and then the imposition of the Goods and Services Tax (GST) on startups and MSMEs, Modi’s policies have consistently favored the rich while crushing the poor. Inflation is at an all-time high, jobs are scarce, and the cost of living is unbearable. For many, the penalties imposed by banks for not maintaining a minimum balance are just another nail in the coffin.
How are the poor supposed to survive in this environment? When even the money they set aside for basic necessities is taken away by banks, how can they possibly hope to build a better life for themselves? Extracting money from the poor in the form of minimum account balance penalties is nothing short of extortion, a direct result of the Modi government’s failure to protect the most vulnerable members of society.
If Narendra Modi and his policies are not replaced, the future of the average Indian looks bleak. The current government seems to be working for the benefit of the rich while ignoring the plight of the poor. If this continues, where will the normal Indian survive?
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