State Bank of India, one of the largest banks in the country is likely to reduce minimum balance requirement for savings accounts. This decision came in the wake of severe criticism from the customers.
SBI currently charges penalty from customers for non-maintenance of monthly average balance in savings accounts. The rate of monthly average balance is Rs 3,000 for metros, Rs 2,000 for semi-urban areas and Rs 1,000 for rural areas.
As per the list of revised charges of State Bank of India, failure to maintain monthly average balance in accounts attracts penalty of up to Rs 100 plus goods and services tax (GST).
In metropolitan areas, the charge will be Rs 100 plus GST, if the balance falls below 75 per cent of the monthly average balance of Rs 5,000. If the shortfall is 50 per cent or less, then the bank will charge Rs 50 plus GST. In rural areas, the monthly average balance requirement is Rs 1,000. Any shortfall in maintaining minimum balance will attract penalty of Rs 20 to Rs 50 plus GST.
But after severe criticism from the customers, the bank reduced those charges with effect from October 1. SBI’s plan to reduce the minimum balance requirement reportedly comes after the negative news on the income generated on the fees.
A Finance Ministry data, released this week, shows that State Bank of India netted a windfall of Rs 1,771.67 crore, more than its second quarter profit, from customers for non-maintenance of monthly average balance in savings accounts in eight months of 2017-18.
The charges for non-maintenance of minimum balance exceed the bank’s July-September quarter net profit of Rs 1,581.55 crore. The amount was also nearly half of the Rs 3,586 crore the bank earned as net profit from April to September.