SBI reviewing minimum balance charges for savings accounts

SBI reviewing minimum balance charges for savings accounts

PTI

As per the list of revised charges of SBI, failure to maintain monthly average balance in accounts will attract penalty of up to ₹100 plus goods and services tax (GST).

State Bank of India (SBI) said it is reviewing charges for certain categories of accounts for non-maintenance of monthly average balance (MAB) after receiving feedback from customers.

In April this year, the country’s largest lender reintroduced charges on non-maintenance of monthly average balance (MAB) after a gap of five years.

“We have received feedback from our customers on the issue and we are reviewing those. The bank will take into account those and make an informed decision,” the banks managing director [national banking group] Rajnish Kumar told PTI.

“We will internally debate whether any moderation for certain categories of customers like senior citizens and students needs to be done anywhere. The charges are never cast in iron,” he said.

As per the list of revised charges of SBI, failure to maintain monthly average balance in accounts will attract penalty of up to ₹100 plus goods and services tax (GST).

In metropolitan areas, there will be a charge of ₹100 plus GST, if the balance falls below 75% of the MAB of ₹5,000. If the shortfall is 50% or less of the MAB, then the bank will charge ₹50 plus GST.

In rural areas, the monthly average balance requirement has been kept at ₹1,000. Any shortfall in maintaining minimum balance in rural areas can attract penalty in the range of ₹20 to ₹50 plus GST.

Mr. Kumar said the bank has over 40 crore savings bank accounts, which includes 13 crore of Basic Savings Bank Deposit (BSBD) and Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts.

The bank has exempted BSBD and PMJDY accounts from maintaining the minimum balance requirement.

Out of the 27 crore normal savings bank accounts, nearly 15-20% customers are not maintaining monthly average balance.

The bank in April had given notices to all those account holders who did not have monthly average balance and asked them to keep the minimum balance in May.

“When they did not maintain the monthly average balance in May then we recovered in June. We had recovered ₹235 crore from such account holders as penalty,” Mr. Kumar said.

He said there is huge cost in maintaining the savings accounts and banks should be allowed to recover some costs.

“There are lots of operational costs. We also have to invest huge amount of money in technology. There are some costs which I think bank should recover,” Mr. Kumar said, adding the charges which SBI is levying for non-maintenance of minimum balance is very competitive as compared to other lenders.

He said a normal savings account holder has an option to convert his account into BSBD account which will exempt him from maintaining monthly average balance.