SBI may cut minimum balance requirement for savings accounts

SBI mulls reducing MAB requirements after backlash

SBI mulls reducing MAB requirements after backlash

The State Bank of India (SBI) is pondering over slashing the minimum balance requirement on savings accounts which is now set at Rs 3,000 in urban centers, Rs 2,000 in semi-urban centers and Rs 1,000 in rural areas.

The bank collected Rs1,771.67 crore from customers on account of non-maintenance of minimum average balance between April and November 2017, according to finance ministry's answer in Lok Sabha on 29 December.

SBI had reduced the charges with effect from 1 October, following criticism. However, following public outcry SBI brought down the minimum balance requirement to Rs3,000 in metros, Rs2,000 in semi-urban areas and Rs1,000 in rural centres.

The penalty for not maintaining the minimum balance ranges from ₹20-₹50 a month depending on the extent of shortfall and the location of the branch.

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As per the current rule of SBI minimum required balance, the customer must have to maintain a minimum balance of Rs. 3000, Rs. 2000, Rs. 1000 according to their areas which is divided into three categories as urban, semi-urban & rural area and the same follows monthly.

Reports quoting sources said the negative news on the income generated on the fees has forced the bank to look at reducing the minimum balance requirement to around Rs1,000 but is yet to take a call.

SBI had unilaterally revised upwards the minimum balance requirement to Rs5,000 for metros and Rs3,000 for semi urban, in April a year ago. The biggest lender had also revised the penalties that account holders are supposed to pay for failing to maintain the stipulated balance in their savings accounts.

Balance below Rs750 would attract fine of Rs50.

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The failure to maintain an average monthly balance of Rs 3,000 draws a penalty of up to Rs 100 plus service tax.

Semi-urban areas - Rs 2,000. Exempted accounts are those related to Pradhan Mantri Jan Dhan Yojana, basic savings bank deposit account, and pensioners and minor accounts, among others. If the shortfall is 50 per cent or less, then the bank charges Rs 50 plus service tax.

The banking regulator Reserve Bank of India (RBI) guidelines mandate that charges for non maintenance of minimum balance in savings bank accounts be "reasonable and not out of line with the average cost of providing the services".

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