SBI declines to share info on money in suspended accounts

The SBI has declined to share information about the quantum of money lying in suspended bank accounts where customers do not claim interest on their deposits due to religious reasons.
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.
These suspended accounts belong to Muslims who do not want interest on their deposits.
The Islamic law or Shariat prohibits paying any fee for renting money (called riba) for specific periods of time. Islamic banks follow the principle of interest-free banking.

The bank was asked to provide details of suspended accounts, including their number and money lying in those. It was also asked to share details of guidelines to deal with interest accruing from the deposits.

The interest which is not claimed by depositors due to religious reasons is kept in suspended bank accounts.
According to an article published in the Reserve Bank of India's journal in 2005, thousands of crores of rupees earned as interest is kept in suspended accounts.
"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," the article read.
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.

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.