SBI hints at minimum balance reduction

SBI hints at minimum balance reduction

SBI hints at minimum balance reduction

The State Bank of India (SBI) is pondering over slashing the minimum balance requirement on savings accounts which is now set at Rs 3,000 in urban centers, Rs 2,000 in semi-urban centers and Rs 1,000 in rural areas. But no official announcement yet.

"A review of the monthly average balance is something we have been looking at continuously since we had brought it back in April and we have already brought it down in October a bit".

The move follows revelations that the bank made Rs1,772 crore by imposing penalties for non-maintenance of minimum balance between April and November 2017. However, following public outcry SBI brought down the minimum balance requirement to Rs3,000 in metros, Rs2,000 in semi-urban areas and Rs1,000 in rural centres.

At that time, it had fixed Rs 5,000 as minimum balance limit for metro city customers, Rs 3,000 for urban, Rs 2,000 for semi-urban and Rs 1,000 for rural customers.

In April 2017, SBI had re-introduced the requirement for maintenance monthly average balance and penalties for non-maintenance after six years. The amount was also almost half of the Rs 3,586 crore the bank earned as net profit from April to September. Exempted accounts are those related to Pradhan Mantri Jan Dhan Yojana, basic savings bank deposit account, and pensioners and minor accounts, among others. However, the urban customers are fined if they fail to maintain 75 percent of the minimum required balance. However, it is lower than large private sector banks.

Speaking to media on the sidelines of an event here, he added that the bank was doing a comprehensive review of the MAB and penalty for non-maintenance, based on the feedback and will soon announce it.

The minimum balance for SBI clientele in rural areas remains unchanged too at Rs 1000, as do most of their penalties for its non-maintenance as per MAB rules. SBI account holders in urban regions of the country will have to maintain Rs 3,000 as monthly average balance, as before.

The government is of the stance that minimum balance penalty should not be charged for Direct Benefit Transfers (DBT).

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