SBI slashes charges on minimum balance in accounts

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

If you have been upset about the charges imposed by public-sector banks for various reasons including non-maintenance of minimum balance, there is some relief.

The State Bank of India has cut charges for non-maintenance of Average Monthly Balance (AMB) in savings accounts by nearly 75 percent.

The revised charges will be effective from April 01, 2018 and will benefit over 25 crore customers.

For semi-urban and rural centres, the charges have been reduced from Rs 40 per month plus GST to Rs 12 & Rs 10 per month plus GST, respectively. "We have always focused on keeping the interests of our customers first and this is one of our many efforts towards fulfilling customer expectations", SBI Managing Director for retail and digital banking P K Gupta said in a release. Both these accounts do not have minimum balance requirements.

Including SBI, other banks across the country also charge penalties if there are not enough funds in the account. Earlier, metro and urban customers were charged Rs 40-100 for not maintaining minimum balance. The move had invited widespread criticism. The new rates will come to effect from April 1, 2018.

The above revision will benefit 25 crore bank customers.

RBI guidelines mandate that charges for non-maintenance of minimum balance in savings bank accounts be "reasonable".

Of the 41 crore savings accounts with SBI, 16 crore accounts under PMJDY / BSBD and of pensioner/minors/social security benefit holders were already exempted from the feature. However, the minimum amount to be maintained in the account remains the same.

SBI's penalty on non-maintenance of AMB has been defended and justified by chairman Rajnish Kumar and his predecessor Arundhati Bhattacharya.

However, it needs to be noted that, the customer can not have any other Savings Bank Account, if he/she has a BSBD Account. My outgo on the ATM card itself is Rs 1,500 crore annually. Currently, the charges are in the range of Rs20-40.

SBI reported a net loss of Rs 2,416 crore for the December quarter as it had to make provisions for rising bad loans.