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