Published: Sat, January 06, 2018
Global Media | By Abel Hampton

SBI may cut minimum balance requirement to Rs 1000 in urban areas

SBI may cut minimum balance requirement to Rs 1000 in urban areas

SBI had reduced the charges with effect from 1 October, following criticism.

Failure to maintain the required monthly average balance or minimum balance in SBI's savings bank accounts attracts a penalty.

Although SBI's minimum balance requirement of Rs 3,000 is lower if compared with private banks, several public sector banks charge a lesser penalty if the customer fails to maintain a minimum balance. During April-November 2017, the bank has netted a windfall of Rs 1,771.67 crore from customers for non-maintenance of monthly average balance in savings accounts. The bank has specified different monthly average balances (MAB) for accounts held in different types of branches. "Based on the feedback, we will take a view", he said on the sidelines of its CSR initiative towards a bus donation to an NGO named "Save the Children India".

Currently, the bank has a monthly average balance of Rs 3,000 for the metro and urban accounts and the non-maintenance penalty varies from Rs 30 to Rs 50 plus taxes. The penalties which ranged from Rs 25 to Rs 100 were lowered to Rs 20-50 range (excluding GST).

SBI has close to 40.5 crore saving bank account customers.

The development comes after the finance ministry flagged off the issue of profits public sector banks made by charging penalty for non-maintenance of monthly minimum balance. The amount was also almost half of the Rs 3,586 crore the bank earned as net profit from April to September. It also slashed charges from 20-50% for non-maintenance of MAB across all population groups and categories.

Countrys largest lender State Bank of India (SBI) is likely to reduce minimum balance requirement for savings accounts, media reports said on Friday.

In June 2017, the bank had changed minimum balance maintenance criteria citing loads of work on its staff and excess liquidity in banks in the aftermath of demonetisation on 8 November, 2016. For MAB less than Rs 500, they will now have to pay Rs 40 instead of Rs 75. The biggest lender in the country is planning the cut after a report revealed that the bank has benefited significantly from the fines imposed on accounts that went below the minimum requirement.

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