SBI hints at minimum balance reduction

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In the July-September quarter, the bank profited Rs 1,581.55 crore from collecting fines for not maintaining the MAB, the amount which is more than its second-quarter profit.

SBI was followed by Punjab National Bank which recorded the collection of Rs 97.34 crore during the April-November period.

SBI had earlier revised the minimum account balance for its savings accounts, as well as the penalties for non-maintenance of minimum balance.

As per the list of revised charges of SBI, failure to maintain monthly average balance in accounts attracts penalty of up to Rs 100 plus goods and services tax (GST).

The SBI customers in metro cities of India will have to maintain at least a sum of Rs 3,000 as monthly average balance in their savings account, as opposed to Rs 5,000.

The customer can now maintain quarterly average balance (QAB) instead of monthly average balance, the statement isssued earlier said.

After the government expressed its dismay over the new minimum average balance (MAB) rule, the bank in its explanation said that it was necessary to increase the minimum balance limit as, according to the bank, it was not making much profit from these accounts.

The MAB for urban SBI customers remains unchanged, as does the penalty for its non-maintenance. The MAB for accounts from metro areas was set at Rs5,000 and those from urban areas at Rs3,000. Accordingly, charges for semi-urban and rural centres were in the range of Rs20-40 and for urban and metro centres Rs30-50. It also slashed charges from 20-50% for non-maintenance of MAB across all population groups and categories.

In rural areas, the monthly average balance requirement has been kept at Rs 1,000.

The bank had said savings bank accounts such as Prime Minister's Jan Dhan Yojana, small accounts and basic savings bank deposit accounts, pensioners, minors and all social beneficiary accounts are exempted from MAB requirement and no charges ever have been recovered.

Federal Bank officials told Mathrubhumi that accounts that require no MAB are available for depositing pensions and scholarships.