State Bank of India SBI slashes low balance charges from ₹.50 to ₹.15 - benefit 25 crore account holders

State Bank of India SBI slashes low balance charges from ₹.50 to ₹.15 - benefit 25 crore account holders

In a move that will benefit about 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% . The revised charges will be effective from 2018, 1 April.

The charges for non-maintenance of AMB for customers in metro and urban centres have been reduced from a maximum of ₹50 per month plus GST to ₹15 per month plus GST.

For semi-urban and rural centres the charges have been reduced from ₹40 per month plus GST to ₹12 and ₹10 per month plus GST respectively.

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). Also many students and underprivileged customers lost their balances because of wrongful classification of accounts as regular savings accounts.

SBI has nearly 41 crore savings bank accounts out of which 16 crore accounts are either under Pradhan Mantri Jan Dhan Yojana (basic savings bank) accounts.

Both these accounts do not have minimum balance requirements.

Besides pensioner / minors / social security benefit holders accounts were already exempted.

In addition, students up to the age of 21 years are also exempted.

The bank also clarified that customers always have the option of converting the regular savings bank account to Basic Savings Bank Account (BSBD account), free of charge, to avail basic savings bank facilities without being subject to maintenance of AMB.

The bank also clarified that the number of accounts closed in the bank is higher this year due to the merger and it has nothing to do with maintenance of the minimum balance.

“On account of the merger of SBI’s associate banks with SBI in April 2017, where customers had multiple accounts with different associate banks and SBI, the number of accounts closed during the year is relatively high,” the bank said in a statement.

Refuting media reports that the SBI has closed 41.16 lakh accounts after introduction of the requirement of AMB, the bank said: “The bank would like to clarify that these accounts have not been closed suo-motu.”

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