news Saturday, May 30, 2015 - 05:30

The Pradhan Mantri Bima Suraksha Yojana (PMSBY) that offered an insurance coverage of Rs 2 lakh for a premium of just Rs 12 , kick started with much fanfare on May 9th. But a controversy is brewing after customers of State Bank of India in Kerala and few media reports alleged that the nationalized bank is deducting Rs 12 from account holders without consent, the bank however has strongly denied the allegations.

Malayala Manorama had earlier reported that State Bank of India is deducting Rs 12 towards PMSBY without the consent of its account holders. According to the report, the bank’s move is a result of pressure from the finance ministry, following poor enrollment rate towards the scheme. The report alleges that in an attempt to portray the scheme’s success, SBI is on a drive to mandatorily deduct the premium. Any such activity is a violation of bank and insurance norms, since the bank is not entitled to withdraw money without the account holder’s consent. It also violates insurance norms which say that the insurance holder must be aware of the terms and conditions of the policy.

However, Ernakulam DGM Muthuvel speaking to The News Minute denied that the bank has made deductions on its own, and refused to comment on the issue. Sivakumar, Secretary to Kerala circle GM denied the allegations and pointed out that the bank will not do anything without the consent of its customers. “We are aware of such allegations against the bank. The bank will issue clarification in a press release that will be issued soon,” he said.

PMSBY was proposed by Union Finance Minister Arun Jaitley in the 2015-16 union budget. The scheme offers a renewable one-year accidental death and disability cover to all savings bank account holders in the age group of 18-70 years for a premium of Rs 12 per annum.

Though SBI maintains that no deductions have been made, social media users have uploaded portions of statement that show a debit of Rs 12, with no explanation.

This was a debit made from an NRI account, account holder wishes to remain anonymous.

A social media user uploaded this screenshot


Though the bank has rejected reports, no explanation has been given as to why these debits have been made, and if not for the insurance scheme, then for what purpose the amount was debited.

SBI’s Kerala circle is divided into two networks, Network One regions comprises of districts like Thiruvananthapuram and Ernakulam and has already enrolled more than 5 lakh of its customers into the policy this month. Meanwhile the Network Two regions with Kozhikode and Thrissur have only gathered around 2 lakh customers for the policy.