SBI likely to lower minimum balance requirement to Rs 1000 in metros
Days after reports emerged that country’s largest lender had collected Rs 1,771 crore in penalties by levying charges on non-maintenance of monthly minimum balance, the State Bank of India (SBI) is reportedly taking another look at its minimum balance requirement which currently stands at Rs 3,000 in urban areas.
According to a report in The Times of India, SBI is planning to change the requirement from monthly average balance to quarterly average balance besides slashing the minimum balance requirement to around Rs 1,000 in metros. The amount was collected during the April-November 2017 period.
The move comes close on the heels of a media report saying that public sector banks collected Rs 2320.96 crore in FY18 by imposing a penalty on customers for not maintaining minimum balance.
SBI was followed by Punjab National Bank which recorded the collection of Rs 97.34 crore during the April-November period. Central Bank of India collected Rs 68.67 crore, while Canara Bank recorded Rs 62.16 crore collection, the report said.
SBI had earlier revised the minimum account balance for its savings accounts, as well as the penalties for non-maintenance of minimum balance. The biggest lender had also revised the penalties that account holders are supposed to pay for failing to maintain the stipulated balance in their savings accounts. Customers will have to pay GST over and above the fine they have incurred. The new minimum balance rules became effective from October 1.
In April 2017, SBI increased its monthly average balance (MAB) requirement to Rs 5000 for branches in six metros. The bank had also raised the penalty to Rs 100 in metro cities. Till March 31 2017, the monthly average balance (MAB) for a savings bank account was Rs 500 without facility of cheque book and Rs 1,000 with cheque book across the country.
Here’s a look at penalties that SBI currently levies for not maintaining monthly average balances depending on the region.
SBI customers in metro cities of India have to maintain at least a sum of Rs 3,000 as monthly average balance in their savings account. If MAB falls between Rs 2,999 and Rs 1,500, then the account holder has to pay Rs 30 as penalty. Whereas, if the average balance at the end of the month comes out to be anywhere from Rs 1,499 to Rs 750 then the penalty for non-maintenance of MAB is Rs 40, and Rs 50 if the MAB is below Rs 750. Earlier, the penalties for these three stages were Rs 50, Rs 75 and Rs 100 respectively.
SBI account holders in urban regions of the country will have to maintain Rs 3,000 as monthly average balance. The penalties and conditions for urban area customers are same as SBI clientele from metro cities.
The MAB for semi-urban areas is Rs 2,000. People with savings accounts with SBI branches in semi-urban areas pay fines to the tune of Rs 20 if their MAB is between Rs 1,999 and Rs 1,000. The semi-urban SBI customer pay Rs 30 if their MAB rests between Rs 999 and Rs 500. For MAB less than Rs 500, SBI customers have to pay Rs 40.
The minimum balance for SBI clientele in rural areas is at Rs 1000. SBI has kept the penalties for rural customers similar to that of its semi-urban clients, at Rs 20 (for MAB between Rs 999 and Rs 500), Rs 30 (for MAB between Rs 499 and Rs 250), and Rs 40 (for MAB at Rs 249 or less).
Exempted from MAB restrictions
Meanwhile, the SBI has also kept certain groups exempted from the restrictions of maintaining a minimum balance at the end of the month, including financial inclusion accounts, basic savings bank deposit accounts, small Accounts, Phela Kadam and Pheli Udaan accounts, minors till the age of 18 years, and all pensioners including recipients of social welfare benefits.
Source by businesstoday..Share: