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SBI likely to cut minimum balance requirement for savings accounts

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

SBI currently charges penalty from customers for non-maintenance of monthly average balance in savings accounts. The rates of monthly average balance is Rs 3,000 for metros, Rs 2,000 for semi-urban areas and Rs 1,000 for rural areas.

The SBI, after a gap of six years, had reintroduced the monthly average balance (MAB) charges from April 1, 2017.
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).

 

In metropolitan areas, there will be a charge of Rs 100 plus GST, if the balance falls below 75 per cent of the MAB of Rs 5,000. If the shortfall is 50 per cent or less of the MAB, then the bank will charge Rs 50 plus GST.

In rural areas, the monthly average balance requirement has been kept at Rs 1,000. Any shortfall in maintaining minimum balance in rural areas can attract penalty in the range of Rs 20 to Rs 50 plus GST.

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

SBI’s plan to reduce the minimum balance requirement reportedly comes after the negative news on the income generated on the fees.

A finance ministry data, released this week, showed that SBI netted a windfall of Rs 1,771.67 crore, more than its second quarter profit, from customers for non-maintenance of monthly average balance in savings accounts in eight months of 2017-18.

The finance ministry data showed the bank charged Rs 1,771.67 crore from customers on account of non-maintenance of minimum average balance between April and November 2017.

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. The amount was also nearly half of the Rs 3,586 crore the bank earned as net profit from April to September.


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Cabinet clears setting up of centralised GST appellate authority

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New Delhi: The Union Cabinet on Wednesday approved setting up of a centralised Appellate Authority for Advance Ruling (AAAR) under the goods and services tax that would decide on cases where there are divergent orders at the state level.

The setting up of a centralised AAAR would require amendments to the GST Acts. The centralised authority as an appellate body will only take up cases wherein the Authority for Advance Ruling (AAR) of two states have passed divergent orders.

The Goods and Services Tax (GST) Council, headed by Finance Minister Arun Jaitley, and comprising state counterparts, in December decided to establish the centralised AAAR.

 

“The Cabinet has cleared the GST appellate authority,” a source said after the meeting of the Cabinet headed by Prime Minister Narendra Modi.

In view of the confusion created by contradictory rulings given by different AARs on the same or similar issues, the industry had been demanding a centralised appellate authority that could reconcile the contradictory verdicts of different AARs.

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Urbanisation to be big driver of Indian economic growth: Kant

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Davos: Urbanisation will be a big driver of economic growth in India going forward, supported by favourable macroeconomic factors, accelerated infrastructure building and continuing reforms, NITI Aayog CEO Amitabh Kant said.

Speaking here at an event on sidelines of the World Economic Forum Annual Meeting, he also said the Indian economy may even exceed the IMF growth forecast of 7.5 per cent for the country.

Kant said IMF has forecast 7.5 per cent growth for India despite a gloomy outlook for the global economy and this itself is good, though there are expectations that this estimate would be surpassed. He said India is giving a big push to urbanisation with more than 100 smart cities being developed.

 

The country is also using technology in a big way to change the way business and governance is done, he added. Besides a massive infrastructure building is happening, bank credit flow has rebounded and macroeconomic factors like inflation and fiscal deficit are also being supportive, Kant said.

DIPP Secretary Ramesh Abhishek noted that states are competing with each other to attract investments and all political parties have adopted the economic reform process. He listed various reform initiatives undertaken in India, including on areas like ease of doing business, FDI, manufacturing and taxation.

They were speaking at Institutional investors’ breakfast roundtable, organised by the industry chamber CII and Kotak Mahindra Bank. Other participants included CII Director General Chandrajit Banerjee and leaders from Indian and foreign companies.

On questions about some persisting issues in doing business including on tax and insolvency related issues, Abhishek said a lot of efforts have been put in to remove all bottlenecks and starting a business doesn’t take more than a day. Besides, special provisions have been made for startups and angel investors, he added.

Kant said efforts are also being made to remove all physical intervention and digitise the entire process of inter-ministerial and inter-department consultations to fast-track the decisions.

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India will surpass China, says Raghuram Rajan

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Davos: India will eventually surpass China in economic size and will be in a better position to create the infrastructure being promised by the Chinese side in South Asian countries, former RBI Governor Raghuram Rajan said.

Addressing a session on Strategic Outlook for South Asia, Dr Rajan said that the Indian economy would continue to grow while growth rate is slowing down in China.

“Historically, India had a bigger role in the region but China has now grown much bigger than India and has presented itself as a counter-balance to India in the region,” Dr Rajan said at the WEF Annual Meeting 2019.

 

“India will become bigger than China eventually as China would slow down and India would continue to grow. So India will be in a better position to create the infrastructure in the region which China is promising today. But this competition is good for the region and it will benefit for sure,” he said.

The comments assume significance with China working on a lot of infrastructure projects across the region. In 2017, India became the sixth largest economy with a GDP of $2.59 trillion while China was the second large with a GDP of $12.23 trillion.

At the same session, Nepal PM K.P. Sharma Oli cited collaboration with China as well as India as reasons for the economic growth.

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