SBI to Reduce Fines on the savings account

SBI cuts charges for non-maintenance of minimum balance Know new rates

‎The bank had faced a lot of flak after it came to light that it earned more from minimum balance penalties than its profits (which were contained because of bad loan provisions).

The SBI Bank has issued a notification on April 1, reducing the penalty on a savings account.

SBI has reviewed its minimum balance requirement following a finance ministry report which showed that SBI collected Rs 1,771 crore during April-November 2017 as a penalty from customers for non-maintenance of monthly average balance in savings accounts. From April 2018 onward, charges for non-maintenance of AMB for customers in metro and urban centres have been reduced from a maximum of Rs 50 per month plus GST to Rs 15 per month.

For rural and semi-urban centres, the charges have been brought down to Rs 10 and Rs 12 per month plus GST respectively from Rs 40 per month plus GST.

SBI's managing director, retail and digital banking, P K Gupta said, the charges have been reduced taking into account the feedback and sentiments of bank's customers. In the big cities, account holders have to keep at least 5,000 rupees, account holders in urban areas, 3,000 rupees, account holders in small towns and Rs. 1,000 in rural areas to keep a minimum amount of 1,000 rupees.

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The above revision will benefit 25 crore bank 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. The bank rejects Jan Dhan accounts, essential funds bank stores (BSBD) accounts, retired people, recipients of social advantages from the legislature and records of minors from the MAB necessity. Both these accounts do not have minimum balance requirements.

However, it needs to be noted that, the customer can not have any other Savings Bank Account, if he/she has a BSBD Account. Besides, it has unveiled a Rs 2.11 lakh crore recapitalisation plan.

SBI claims the reduction is expected to benefit 250 million customers. "Somewhere the bank also needs to recover its cost", he had said. "But it can't work this way that everything comes free", Kumar said.

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