SBI to cut balance-related penalties

MUMBAI:The State Bank of India (SBI) on Tuesday said it would reduce the penalty for non-maintenance of an average monthly balance (AMB) by up to 75 per cent. The move, which will benefit more than 25 crore customers, will come into effect from April 1.It may be noted that the country’s largest lender faced flak for raking in Rs 1,771 crore in income for the first eight months of the current financial year via non-maintenance charges, higher than the net profits the bank earned during the July-September quarter at Rs 1,581.55 crore.

“We have reduced these charges taking into account the feedback and sentiments of our customers,” said P K Gupta, Managing Director, SBI adding, “The bank always focused on keeping the interests of its customers first and this is one of our many efforts towards fulfilling customers’ expectations.”

The AMB is the minimum balance customers are required to maintain in their bank accounts, which SBI had re-introduced in April 2017 after a lag of six years. While for account holders in metro and urban areas it is set at Rs 5,000 and Rs 3,000, respectively, for customers in semi-urban and rural areas it is fixed at Rs 2,000 and Rs 1,000, respectively. Currently, the bank, like others, levies a monthly penalty of Rs 50 for non-maintenance of minimum balance in metro and urban centres, and those in semi-urban and rural areas are charged Rs 40. These charges are excluding GST.

As per the revised charges, SBI will charge customers in metro and urban cities Rs 15 per month, excluding GST, and customers in rural and semi-urban centres will be charged Rs 10 and Rs 12 per month, respectively.
According to Gupta, SBI offers its customers options to convert their regular savings bank account into a basic savings bank account without being subject to maintenance of an AMB.

In all, SBI has 41 crore savings bank accounts, of which 16 crore are under the Pradhan Mantri Jan Dhan Yojna/Basic Savings Bank Deposit, and of pensioners, minors or social security benefit holders. These accounts are exempt from charges for non-maintenance of a minimum balance.