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Reconsider penalty for not keeping minimum balance: Govt asks SBI

The government on Monday asked SBI to reconsider its decision to levy penalty on non-maintenance of minimum balance, which the bank plans to hike manifold from April 1 impacting over 31 crore savings bank account holders.

business Updated: Mar 06, 2017 21:52 IST
PTI
People stand in queue to withdraw and deposit currency outside SBI Bank and ATM at Elphinston road in Mumbai, India, on Tuesday, December 6, 2016.
People stand in queue to withdraw and deposit currency outside SBI Bank and ATM at Elphinston road in Mumbai, India, on Tuesday, December 6, 2016.(Pratik Chorge/HT File Photo)

The government on Monday asked SBI to reconsider its decision to levy penalty on non-maintenance of minimum balance, which the bank plans to hike manifold from April 1 impacting over 31 crore savings bank account holders.

State Bank of India, according to a source, has also been asked to reconsider charges it proposes to levy on cash transactions and ATM withdrawals over specified limits.

The country’s largest lender has announced imposing penalty ranging from Rs 20-100 on non-maintenance of Minimum Average Balance (MAB) in savings bank accounts from April 1. The penalty is as high as Rs 500 in case of current accounts.

The penalty for breach of MAB is being reintroduced after a gap of five years.

Read | SBI customers, brace for 10-fold hike in minimum balance in your savings account

The bank has also increased the minimum balance requirement by many times, which is as high as Rs 5,000 for account maintained with branches in six metro cities.

SBI has also imposed restrictions on withdrawals of cash from its branches as well as ATMs. These will attract charges after certain specified limits.

“Government has asked SBI to reconsider it’s decision to impose a penalty on non- maintenance of minimum balance in accounts from April 1 onwards,” the source said.

The government has also urged SBI and other lenders, including private sector banks to “reconsider the charges on cash transactions and ATM withdrawals above a certain limit”.

Some private banks, like HDFC Bank, ICICI Bank and Axis Bank, have started charging a minimum amount of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.