Following criticism, SBI looks at revising minimum balance amount and penalty

Following criticism, SBI looks at revising minimum balance amount and penalty

Following criticism, SBI looks at revising minimum balance amount and penalty

Mumbai: State Bank of India (SBI) is in the process of comprehensively reviewing the requirement for minimum balance in savings account and the charges applicable for non-maintenance, and will soon make the announcement, said managing director Praveen Kumar Gupta.

As a result, between April and November 2017, the bank had netted a windfall of Rs 1,771.67 crore, which is more than its second-quarter profit, as penalties from customers for non-maintenance of MAB, finance ministry data showed. The bank has specified different monthly average balances (MAB) for accounts held in different types of branches, i.e. metro, urban, semi-urban, rural. The figure exceeds SBI's July-September quarter net profit of Rs 1,581.55 crore.

In April 2017, SBI had re-introduced the requirement for maintenance monthly average balance and penalties for non-maintenance after six years. According to the bank's revised charges, the charges are Rs 100 plus taxes. The amount was also almost half of the Rs 3,586 crore the bank earned as net profit from April to September.

The customer can now maintain quarterly average balance (QAB) instead of monthly average balance, the statement isssued earlier said.

"The bank also clarified that customer always has the option of converting the regular savings bank account to Basic Savings Bank Deposit (BSBD) account, free of charge, in case he desires to avail basic savings bank facilities without being subject to maintain MAB". If MAB falls between Rs 2,999 and Rs 1,500, then the account holder will have to pay Rs 30 as penalty.

As per the current rule of SBI minimum required balance, the customer must have to maintain a minimum balance of Rs. 3000, Rs. 2000, Rs. 1000 according to their areas which is divided into three categories as urban, semi-urban & rural area and the same follows monthly.

The bank subsequently lowered the MAB following criticism from the customers. Accordingly, the bank demands Rs 5,000 in MAB in metros and Rs 1,000 in rural accounts, failing which it charges a penalty.

Also, pensioners, beneficiaries of government schemes and minors are exempted from levy of minimum balance charges with effect from October 1.

Latest News