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

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

However, following public backlash the bank brought down the minimum balance requirement to Rs 3,000 in metros, Rs 2,000 in semi-urban and Rs 1,000 in rural centres.

SBI now charges penalty from customers for non-maintenance of monthly average balance in savings accounts.

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.

SBI has around 420 million savings bank accounts, of which around 130 million are exempted from MAB requirement.

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. Later, as it received flak from customers, it reduced the charges with effect from October 1. "We brought it back in April and we reviewed it in October; now also we are in the process of reviewing it". It should happen very soon.

"That is something we have been looking at continuously", P.K. Gupta, managing director, SBI said.

"We have got some feedback".

So far, it requires its savings bank account holders to maintain certain minimum balance every month.

As per the list of revised charges of SBI, failure to minimum balance in accounts attracts a penalty of up to Rs 100 plus service tax.

These are metro, rural, urban and semi-urban.

The penalty for not maintaining the minimum balance ranges from ₹20-₹50 a month depending on the extent of shortfall and the location of the branch.

Minimum balance in metro areas: Rs3,000.

Currently, customers of the bank in metro and urban areas are required to maintain an average monthly balance of ₹3,000, while the same for semi-urban areas is ₹2,000 and for rural areas, it is ₹1,000. These accounts also have their limitations in its operations, largely kept the lower end of the pyramid for basic banking services.

This all took place in June 2016 when SBI had increased the minimum required balance to Rs. 5000 to recover their all financial losses.

It may be noted that the minimum balance requirement of SBI is higher than many Public Sector Banks (PSB).

Balance below Rs750 would attract fine of Rs50.

The MAB for semi-urban areas has been unchanged at Rs 2,000, but penalties for non-maintenance have been slashed for this group. For MAB less than Rs 500, they will now have to pay Rs 40 instead of Rs 75.

Balance at Rs 249 or less - Rs 40.

The State Bank of India is planning to trim its minimum balance requirement after a report that said the lender profited from fines.

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