State Bank of India has done away with the requirement of maintaining a minimum balance in its savings accounts. The biggest lender in the country has also rationalised interest rate on all savings account to a flat 3 per cent. The move is expected to affect 44.51 crore accountholders.
Currently, SBI customers have to maintain Average Monthly Balance (AMB) of Rs 3,000, Rs 2,000 and Rs 1,000 in metro, semi urban and rural areas, respectively. Accountholders have to pay penalties in the range of Rs 5 to Rs 15 plus taxes on non-maintenance of AMB. Now all of them can maintain zero balance accounts.
"Bank has also rationalised interest rate on SB Account to a flat 3 per cent p.a. for all buckets," SBI said in a statement.
Currently, SBI offers interest rate of 3.25 per cent on savings bank accounts with deposits up to Rs 1 lakh. For savings account with deposits above Rs 1 lakh, the bank pays 3 per cent as interest. SBI has also waived SMS charges for its customers.
Recently, SBI slashed the fixed deposit rates across multiple tenors for general customers as well as senior citizens. The rates have been reduced by up to 50 bps in some tenors, while some tenors witnessed a reduction of 10 bps. The new rates were made applicable on March 10.
The bank also cut Marginal Cost of Funds Based Lending Rate (MCLR) by up to 15 bps across a few tenors. The new MCLR rates also came into effect from March 10. Banks are required to change the external benchmark based rate at least once in three months. This change depends on underlying external rate like repo rate. SBI's external benchmark lending rate is linked to RBI's repo rate.