SBI Begins To Close Several Society Savings Bank Accounts
Kolkata: State Bank of India (SBI) has started closing savings accounts of several NGOs, trusts and other registered societies across the country, putting the spotlight on a banking rule that governs savings bank (SB) deposits.
SBI has closed down savings accounts of Leonid Cooperative Housing Society in Kolkata as societies registered under the State Co-operative Societies Acts are not eligible to open a savings bank account. Savings accounts maintained by societies or trusts are typically not remunerative as they tend to keep small balances.
SBI told these entities to open current accounts instead. The Reserve Bank of India does not put any restriction on opening savings bank accounts for societies registered under the Societies Registration Act, 1860, while housing co-operative societies, panchayat samitis and different government boards are barred from maintaining one.
"There are some SB accounts opened at various branches in the name of entities which should not have been opened as SB accounts (ineligible) as per RBI guidelines. We are requesting these entities to close such SB accounts and open them as current accounts," SBI said, responding to ET's e-mail sent to its chairman Arundhati Bhattacharya.
But in the process, SBI may have sent similar letters to a few eligible candidates as well. "We have received letters from SBI at our various branches across the country with a request to close down savings bank accounts. But we are registered under West Bengal Societies Registration Act 1961," said Nirmalya Bhattacharya, executive director with Friends for Tribal Society, which runs 54,240 schools for providing functional literacy under the Ekal Vidyalaya programme.
Netaji Bhavana Manch, a Kolkata-based Trust, has received similar instructions from SBI, although it isn't clear whether trusts can maintain savings bank accounts or not.
"There's total confusion over the rule governing savings bank accounts," said Purabi Roy, secretary of the trust, adding that "an SBI official verbally told us to keep the account even after sending a closure request".
However, SBI said that the size of the balance is not a factor for winding up such accounts. "We do not have any minimum balance requirements on our SB accounts. We reiterate that there's no bar to opening SB accounts in the name of eligible entities in accordance with regulatory guidelines," Giri Kumar, SBI's deputy general manager, told ET.