In a move that is likely to benefit around 25 crore customers of the PSU bank, the State Bank of India (SBI) on Tuesday slashed charges for non-maintenance of Average Monthly Balance (AMB) in savings accounts by nearly 75 per cent. The SBI, India's largest PSU bank, has reportedly said that the decision of slashing AMB was taken keeping in view the feedback from various stakeholders.
SBI's current minimum balance for urban areas is Rs 3,000, while for semi-urban and rural areas it is Rs 2,000 and Rs 1,000, respectively.
The 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 plus GST. For Semi-Urban and Rural centres the charges have been reduced from Rs 40 per month plus GST to Rs 12 per month and Rs 10 per month plus GST respectively, a TOI report said.
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.
In October last year, SBI had slashed service charges on not maintaining monthly average balance by a whopping 20-50%. Earlier, metro and urban customers were charged Rs 40 to Rs 100 rupees for not maintaining average balance. This penalty was brought down to Rs 30-50. The charges at semi-urban and rural centres were also revised to Rs 20-40 from Rs 25-75, said an Economic Times report.
SBI had earlier defended the charging of penalties, saying that it was meagre compared to services it provided. SBI had earlier said, "On an average balance of Rs 3,000 in the metro, SBI earns Rs 6 only per month, whereas for a minimum balance of Rs 1,000 in rural, bank earns Rs 2 per month which is meagre when compared to the services offered."
RBI guidelines mandate that charges for non-maintenance of minimum balance in savings bank accounts be "reasonable".