SBI likely to lower minimum balance requirement, move to quarterly averages
The move comes after SBI faced criticism over reports that the bank had earned Rs1,771.67 crore from customers for not maintaining enough balance in their savings accounts.Updated: Jan 05, 2018 07:31 IST
The State Bank of India (SBI) is likely to make changes to its rules for maintaining minimum balance in savings accounts and slash the penalties for going under the limit, officials familiar with the matter said on Thursday.
The officials said that the country’s largest lender is likely to move from a system of average monthly balance to an average quarterly balance.
“The charges for non-maintenance of minimum balance will be reduced by two-thirds of the current penalty,” said an official, who asked not to be named.
Currently, the monthly average balance (MAB) for SBI savings accounts in urban and metro centres is Rs3,000, in semi-urban centres Rs2000, and Rs1,000 in rural centres.
The monthly penalty for non-adherence is between Rs30 and Rs50 in urban and metro centres, and Rs20 to Rs40 in semi-urban and rural areas.
This move comes after SBI faced criticism over reports that the bank had earned Rs1,771.67 crore from customers for not maintaining enough balance in their savings accounts. The information was obtained from data from the finance ministry.
The charges collected by SBI exceeded the bank’s July-September quarter net profit of Rs1581.55 crore.
SBI, which has close to 405 million savings account customers, had reintroduced MAB penalty charges in April 2017 after a gap of six years. The MAB rules were tweaked in October, when the balance requirements and penalties were reduced.
The state-run bank’s MAB charges were raised in Parliament during this session. Facing criticism, SBI said on January 2: “We would like to clarify that savings bank accounts such as Prime Minister’s Jan Dhan Yojna (PMJDY), small accounts and Basic Savings Bank Deposit (BSBD) accounts, pensioner, minor and all social beneficiary accounts are exempted from MAB requirement, and no charges ever have been recovered.”
Another official in the know of the changes said that the bank would announce the new rules shortly.
“A bank is like a purse for the common people but their trust in it is being eroded due to the various fees and fines that are being levied these days. Keeping their social responsibility in mind, banks should have different fees and penalties for different categories of customers,” said G Gurucharan, former secretary in the ministry of consumer affairs.