SBI minimum account balance penalty relaxed: All you need to know
Mar 13 2018 by Desiree Burns
Country's largest lender State Bank of India (SBI) has substantially reduced charges for non-maintenance of average monthly balance (AMB) in savings accounts, which would benefit 25 crore banks' customers, an official statement said here on Tuesday. The changes will be effective from April 1. The decision comes in view of the feedback from the various users. In October, the SBI had begun charging a whopping 20-50 per cent service charge for not maintaining monthly average balance.
In semi-urban and rural centres the charges have been trimmed from Rs 40 per month plus GST to Rs 12 and Rs 10 per month plus GST, respectively.
Now, The charges for non-maintenance of AMB customers in Metro cities (Mumbai, Delhi, Kolkata) and Urban centres have been reduced from 50Rs per month to 15Rs per month.
In a move that will provide widespread relief to over 25 crore account holders, the revised average minimum balance (AMB) rates have been cut by up to 75% and will be applicable from April 1. The amount was more than SBI's July-September quarter net profit of Rs 1,581.55 crore and almost half of the Rs 3,586 crore it earned as net profit April-September.
The minimum balance for SBI savings accounts is Rs 3,000 for accounts in urban and metro areas. These charges are between Rs20 and Rs40 in semi-urban and rural branches. SBI earned Rs 1,771 crore in 8 months by charging people for non-maintenance of AMB, while their July-September quarter net profit was Rs 1,581.55 crore. This penalty was brought down to Rs 30-50.
Of the 41 crore savings accounts with SBI, 16 crore accounts under PMJDY / BSBD and of pensioner/minors/social security benefit holders were already exempted from the feature.
In April 2017, SBI had re-introduced the requirement for maintaining AMB and imposed penalties for non-maintenance after six years.
Additionally, students up to the age of 21 years are also exempted. The bank rejects Jan Dhan accounts, essential funds bank stores (BSBD) accounts, retired people, recipients of social advantages from the legislature and records of minors from the MAB necessity. My outgo on the ATM card itself is Rs 1,500 crore annually.