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

Joy Montgomery
January 8, 2018

At present, the bank has set Rs 3,000 as minimum balance limit for account holders in a metro city branch, according this Economic Times report.

State Bank of India (SBI) - the country's largest lender - has hinted at lowering the minimum balance that customers are required to maintain in their savings accounts.

The bank collected Rs1,771.67 crore from customers on account of non-maintenance of minimum average balance between April and November 2017, according to finance ministry's answer in Lok Sabha on 29 December.

When asked if reduction of monthly average balance (MAB) is on the cards, Gupta said SBI has got some feedback on the same and the bank will take a view on the same in the review.

The charges collected by SBI for non-maintenance of minimum balance exceeds the bank's July-September quarter net profit of Rs 1,581.55 crore. Customers in the metro and urban centres will now have to maintain average Rs 1,000 during the quarter compared to Rs 3,000 average on a monthly basis.

"The amount of average balance requirement in savings account has also been reduced substantially". The amount was also almost half of the Rs 3,586 crore the bank earned as net profit from April to September.

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As per the list of revised charges of SBI, failure to maintain monthly average balance in accounts attracts penalty of up to Rs 100 plus goods and services tax (GST).

The MAB for urban SBI customers remains unchanged, as does the penalty for its non-maintenance. Accordingly, the bank demands Rs 5,000 in MAB in metros and Rs 1,000 in rural accounts, failing which it charges a penalty.

The MAB for semi-urban areas has been unchanged at Rs 2,000, but penalties for non-maintenance have been slashed for this group.

The bank had said savings bank accounts such as Prime Minister's Jan Dhan Yojana, small accounts and basic savings bank deposit accounts, pensioners, minors and all social beneficiary accounts are exempted from MAB requirement and no charges ever have been recovered.

SBI has kept the penalties for rural customers similar to that of its semi-urban clients, at Rs 20 (for MAB between Rs 999 and Rs 500), Rs 30 (for MAB between Rs 499 and Rs 250), and Rs 40 (for MAB at Rs 249 or less).

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