Facing Backlash, SBI Cuts Minimum Balance Penalty Charges

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In a move that will benefit 25 crore account holders, State Bank of India (SBI) + has reduced charges for non-maintenance of Average Monthly Balance (AMB) in savings accounts by up to 70 per cent. The fee for this new tariff will be effective from April 1. The decision comes in view of the feedback from the various users.

In October a year ago, SBI had slashed service charges on not maintaining monthly average balance by a whopping 20-50%. Likewise, for Rural centres and Semi-Urban customers, the charges have been cut from Rs 40 every month to Rs 12.

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 to Rs 15 per month.

On the reduction of these charges, PK Gupta, MD - Retail and Digital Banking, SBI said, "We have reduced these charges taking into account the feedbacks and sentiments of our customers".

Between April and November 2017, the bank netted a windfall of Rs 1,771.67 crore, more than its second-quarter profit, from customers for non-maintenance of minimum balance, according to the finance ministry data. The sum was more than SBI's July-September quarter net benefit of Rs 1,581.55 crore and nearly 50% of the Rs 3,586 crore it earned as net benefit April-September.

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The above revision will benefit 25 crore bank customers.

At SBI, in metro and urban centres, a customer has to maintain a AMB of Rs 3000, while in semi-urban region the AMB stands at Rs 2000 and in rural centres a Rs 1000 AMB is needed.

In April 2017, SBI had re-introduced the requirement for maintaining AMB and imposed penalties for non-maintenance after six years. This penalty was brought down to Rs 30-50.

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. The Jan Dhan Yojana accounts and Basic Savings Bank Deposit Accounts, also called no-frills accounts, are exempt from minimum balance requirements. Besides, it has unveiled a Rs 2.11 lakh crore recapitalisation plan.

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