SBI to Reduce Fines on the savings account

Sergio Conner
March 13, 2018

For eliminating the tension mounting over maintaining average minimum balance among Indian citizens, the largest financial service provider State Bank of India (SBI) in a major move has made a decision to trim down the charges levied on AMB in savings account with effect from April 01, 2018.

In metropolitan areas, a shortfall of 50% or less in the average balance for a month will be penalised Rs 10 instead of Rs 30.

According to release, for semi-urban centres, the charges have been reduced from Rs 40 to Rs 12 per month plus GST and for rural centres. The revised charges for non-maintenance of minimum balance in metro and urban centres have been reduced to Rs 15 per month plus GST from a maximum of Rs 50 per month plus GST. "The bank has always focused on keeping the interests of its customers first and this is one of our many efforts towards fulfilling customers' expectations", he added.

SBI has reviewed its minimum balance requirement following a finance ministry report which showed that SBI collected Rs 1,771 crore during April-November 2017 as a penalty from customers for non-maintenance of monthly average balance in savings accounts. In the big cities, account holders have to keep at least 5,000 rupees, account holders in urban areas, 3,000 rupees, account holders in small towns and Rs. 1,000 in rural areas to keep a minimum amount of 1,000 rupees. These charges are between Rs20 and Rs40 in semi-urban and rural branches.

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The bank excludes Jan Dhan accounts, basic savings bank deposits (BSBD) accounts, pensioners, beneficiaries of social benefits from the government and accounts of minors from the MAB requirement.

This choice takes extreme feedback that the bank earned strong pay of Rs 1,771 crore in only 8 months from contributors who neglected to keep up the balance in their bank accounts. Besides, it has unveiled a Rs 2.11 lakh crore recapitalisation plan.

While levying of charges by public sector banks, for not maintaining minimum balances, has been in the news; it is still very low in comparison to that imposed by private sector banks.

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