Minimum balance penalty: SBI says it has reduced charges by up to 40% since April
BusinessToday.In August 6, 2018
A day after it was reported that total 24 banks collected over Rs 5,000 crore for the non-maintenance of minimum balance in FY18, the state-owned State Bank of India clarified on Monday that it has reduced the average monthly balance (AMB) requirement by up to 40 per cent since April, and that the bank does not charge anything from customers having basic saving accounts or pensioners, miners, etc.
The country's largest public sector bank, in a statement, said, its charges for the non-maintenance of average monthly balance are one of the lowest in the industry. "The bank has steeply reduced the charges for non-maintenance of average monthly balance up to 70 per cent in metro or urban and semi-urban categories. Charges in the rural market were also reduced up to 75 per cent."
"Bank accounts such as Pradhan Mantri Jan Dhan Yojana or basic savings bank deposit or the accounts of pensioners, minors, social security benefit holders, etc, are exempted from any such requirement," said the statement. The bank has around 42.5 crore savings bank accounts, of which almost 40 per cent accounts are under the exempted category, said the SBI, adding that customers also have the option to convert their existing savings accounts to BSBD account for free.
As many as 21 public sector banks (PSBs) and three major private sector lenders have collected Rs 5,000 crore from customers for non-maintenance of minimum balance in their accounts in 2017-18. Among the PSBs, the State Bank of India emerged the highest earner with Rs 2,433-crore penalty, nearly half of the total collection. The SBI's minimum average balance requirement for its customers in metro cities is Rs 3,000. If the average balance falls between Rs 2,999 and Rs 1,500, then the bank charges Rs 30 as a penalty. And if it goes down further from Rs 1,499 to Rs 750, then the SBI charges Rs 40, and Rs 50 if the MAB is below Rs 750.
In the private sector, HDFC Bank, Axis Bank and ICICI Bank are the highest collectors. With Rs 590-crore collection HDFC is at the top, followed by Axis Bank which earned Rs 530 crore. ICICI Bank collected Rs 317 crore as penalty for the financial year 2017-18. The Punjab National Bank (PNB) collected Rs 211 crore as penalty. The minimum balance limit for general savings account in PNB is Rs 500 for rural areas and Rs 1,000 for semi-urban areas.
(Edited by Manoj Sharma)