SBI cuts charges for non-maintenance of minimum balance
Mumbai: State Bank of India (SBI) on Tuesday announced up to 75% reduction in charges levied on savings bank account customers for not maintaining the average monthly balance (AMB). However, the lender has retained the amount that has to be maintained as AMB.
The new charges are applicable from 1 April.
For customers in metro and urban areas, applicable charges for not maintaining Rs3,000, which is the AMB, have been brought down to Rs10-15 from Rs30-50 currently. Within a particular category, the bank levies charges depending on the shortfall. For instance, if the shortfall is greater than 75%, charges applicable would be Rs15 as compared to Rs50 earlier.
Applicable goods and service tax (GST) is added to the charges.
SBI has also slashed charges for not-maintenance of Rs2,000 as ABM in bank accounts in semi-urban areas to Rs7.50-12 and Rs1,000 in accounts in rural area to Rs5-10. Currently, the charges are in the range of Rs20-40.
P.K. Gupta, managing director, retail and digital banking at SBI, said the bank has reduced the charges on the basis of customer feedback.
SBI claims the reduction is expected to benefit 250 million customers.
The state-owned lender has around 410 million savings bank accounts, of which around 160 million are exempted from AMB requirement. Exempted accounts are those related to Pradhan Mantri Jan Dhan Yojana, basic savings bank deposit account, and accounts of pensioners and minors, among others.
In April 2017, SBI had re-introduced the requirement for maintaining AMB and imposed penalties for non-maintenance after six years. The AMB for accounts from metro areas was set at Rs5,000 and those from urban areas at Rs3,000. The bank had subsequently lowered the AMB, following criticism from the customers.
SBI collected Rs1,771.67 crore from customers on account of non-maintenance of AMB between April and November 2017, according to the finance ministry’s answer in Lok Sabha on 29 December.