SBI refuses to share information on money stashed in suspended accounts

India's largest public sector bank, the SBI has refused to share the information on money stashed in suspended bank accounts in which the interest amount of customers, who do not claim it due to religious reasons, is also kept. 

Replying to an RTI query, the State Bank of India (SBI) said it does not maintain such information in its database "in normal course of business and extraction of the same will be voluminous and time taking activity". "We, therefore, decline your application under Section 7 (9) of RTI Act as the information sought by you is likely to divert disproportionately the resources of the bank," it said in reply to the application filed by PTI. 

The section bars disclosure of information which would disproportionately divert the resources of the public authority or would be detrimental to the safety or preservation of the record in question.

Read | Govt aims to consolidate public sector banks post successful merger of five associates with SBI 

The bank was asked to provide details of suspended accounts including their total number and amount lying in them. It was also asked to share details of guidelines to deal with such amount of interest. The interest money which is not claimed by people due to religious obligations is kept in suspended bank accounts. 

According to an article published in Reserve Bank of India's journal in 2005, it was reported that in India thousands of crores earned in interest is kept in suspended accounts. 

Read |  SBI to carry forward government's Digital India agenda, targets transactions worth Rs 1 lakh in 2017-18

"Research reveals that a handsome bulk of money in India owned by believers is lying idle, which if invested in profit sharing basis and utilised properly, can have a major impact on the Indian economy," reads the article. 

As an initiative towards the introduction of Islamic banking in India, a single window can be set up in banks like SBI to do Islamic banking. "This can tap the unused money lying idle that can be utilised for the economic and social benefit of the nation," it had suggested.

Read | Cashless transactions: Postal dept, SBI join hands to promote buddy e-wallet and POS machines 

In 2008, a committee on financial sector reforms, headed by former RBI governor Raghuram Rajan, had stressed on the need for a closer look at the issue of interest-free banking in the country. 

Replying to another application under the transparency law, the RBI had recently said there was no deadline for introduction of Sharia or interest-free banking in India. Islamic or Sharia banking is a finance system based on the principles of not charging interest which is prohibited under Islam. 

(With inputs from PTI)