SBI slashes monthly balance charges by 75 per cent

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

The country's largest lender State Bank of India (SBI) has announced reduction of these charges from 1 April 2018. In October, the SBI had begun charging a whopping 20-50 per cent service charge for not maintaining monthly average balance.

The bank said in a release that customers in metro and urban centres will now have to pay Rs 15 per month plus GST. "We have reduced these charges taking into account the feedback and sentiments of our customers", SBI's managing director (retail and digital banking) P.K. Gupta said.

SBI has slashed rates of Average Monthly Balance in banks for metro and urban centers from Rs 50 to Rs 15, while the charges for semi-urban and rural centers have been slashed from Rs 40 to Rs 12. and Rs 10.

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Nearly, 25 crore bank customers will be getting the benefit of this order. 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. This penalty was conveyed down to Rs 30-50. The charges at semi-urban and rural centres were also revised to Rs 20-40 from Rs 25-75.

The bank excludes Jan Dhan accounts, basic savings bank deposits (BSBD) accounts, pensioners, beneficiaries of social benefits from the government and accounts of minors from the MAB requirement. SBI earned Rs 1,771 crore in 8 months by charging people for non-maintenance of AMB, while their July-September quarter net profit was Rs 1,581.55 crore. Besides pensioner/minors/social security benefit holders accounts were already exempted. ‎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). Besides, students aged below 21 years are also not required to maintain minimum balance.

Last month, Kumar had said savings accounts are a product in which it is expected that some money would be available and transactions will take place. Besides, it has unveiled a Rs 2.11 lakh crore recapitalisation plan.

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