Relief For SBI Customers, Penalty For Not Maintaining AMB Reduced By 75%

State Bank of India has retained the amount that has to be maintained as average monthly balance

State Bank of India has retained the amount that has to be maintained as average monthly balance

SBI cuts down charges on minimum balance maintenance.

The State Bank of India in its latest order relaxed penalty over maintenance of minimum balance of an account.

The bank has a very strong deposit franchise having 41 crores Savings Bank accounts out of which 16 crore accounts under PMJDY / BSBD and of pensioner/minors/social security benefit holders were already exempted.

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 now.

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.

P.K. Gupta, managing director, retail and digital banking at SBI, said the bank has reduced the charges on the basis of customer feedback.

The minimum balance for SBI savings accounts is Rs 3,000 for accounts in urban and metro areas.

Gupta said, "Bank also offers its customers to shift from regular savings bank account to BSBD account on which no charges are levied". The fee for this new tariff will be effective from April 1.

The bank believes that the above revision in AMB will benefit 25 crore customers.

The move will eat into the fee income of the bank, which had reported the first quarterly loss in 20 years, as it had to make huge provisions for bad loans. While ICICI charges Rs 100 plus 5 percent of the shortfall in required MAB, HDFC Bank charges up to Rs 600 for not maintaining the balance. SBI had brought back this requirement for its savings accounts in April 2017, after a gap of 6 years. With SBI taking this step, it can be expected that other banks would follow too.

However, it needs to be noted that, the customer can not have any other Savings Bank Account, if he/she has a BSBD Account. The sum was more than SBI's July-September quarter net benefit of Rs 1,581.55 crore and nearly 50% of the Rs 3,586 crore it earned as net benefit April-September. Besides, it has unveiled a Rs 2.11 lakh crore recapitalisation plan. "But it can't work this way that everything comes free", Kumar said.

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