SBI To Cut Minimum Balance Requirement

  • SBI To Cut Minimum Balance Requirement

SBI To Cut Minimum Balance Requirement

The State Bank of India is planning to diminish its minimum balance requirement which is Rs 3000 as of now in urban areas, Rs. 2000 in semi-urban areas and Rs. 1000 for the rural areas.

SBI is reviewing its minimum balance requirement following a finance ministry reports which showed that SBI collected Rs 1,771 crore during April-November 2017 as a penalty from customers for non-maintenance of monthly average balance in savings accounts. The figure exceeds SBI's July-September quarter net profit of Rs 1,581.55 crore.

SBI has close to 40.5 crore savings account customers.

However, after criticism by customers, it reduced those charges with effect from October 1.

For metro cities, initially the minimum balance was Rs 5,000 but later in September brought down to Rs 3,000. It should happen very soon. "Now we are in the process of reviewing it again", MD for retail and digital banking PK Gupta told reporters here on Friday.

"We have got some feedback". Whereas, if the average balance at the end of the month comes out to be anywhere from Rs 1,499 to Rs 750 then the penalty for non-maintenance of MAB will be Rs 40, and Rs 50 if the MAB is below Rs 750.

These are metro, rural, urban and semi-urban.

The country's largest lender which has over 402 million savings account holders, had reintroduced monthly average balance (MAB) charges from April 2017 after a gap of five years. The amount of penalty depends upon the degree of shortfall.

At that time, it had fixed Rs 5,000 as minimum balance limit for metro city customers, Rs 3,000 for urban, Rs 2,000 for semi-urban and Rs 1,000 for rural customers. These accounts also have their limitations in its operations, largely kept the lower end of the pyramid for basic banking services.

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.

Balance below Rs750 would attract fine of Rs50. Customers fail to maintain the required minimum balance will have to bear a penalty which leads to deduct a specific amount up to Rs. 100 plus service tax from the customer's account.