SBI reduced minimum balance limit for savings account, effective on April 1

SBI reduced minimum balance limit for savings account, effective on April 1

The country's largest lender, State Bank of India (SBI) has slashed charges for non-maintenance of Average Monthly Balance (AMB) in savings accounts by almost 75 per cent.

Last April, the nation's largest lender had re-introduced the penal charges on non-maintenance of average monthly balance, after a gap of five years.

In semi-urban and rural centres the charges have been trimmed from Rs 40 per month plus GST to Rs 12 and Rs 10 per month plus GST, respectively. The revised charges for non-maintenance of minimum balance in metro and urban centres have been reduced to Rs 15 per month plus GST from a maximum of Rs 50 per month plus GST.

Retail & Digital Banking, SBI said, "We have reduced these charges taking into account the feedback and sentiments of our customers".

Between April 2017 and November 2017, SBI had collected Rs1,771.67 crore from customers on account of non-maintenance of AMB, according to a response that the Ministry of Finance gave in Lok Sabha in February 2018 (read it here).

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SBI claims the reduction is expected to benefit 250 million customers.

Shifting to BSBD account is even more convenient and flexible, because there is no charges levied by SBI on them. SBI had earlier said, "On an average balance of Rs 3,000 in the metro, SBI earns Rs 6 only per month, whereas for a minimum balance of Rs 1,000 in rural, bank earns Rs 2 per month which is meagre when compared to the services offered". These accounts are already exempted from charges on non- maintenance of minimum balance. This penalty was conveyed down to Rs 30-50. These charges are between Rs20 and Rs40 in semi-urban and rural branches.

Interestingly, while SBI provided relief to customers in regards to AMB in savings account, it also encouraged customers for shifting towards Bank Saving Bank Deposit (BSBD) account. Exempted accounts are those related to Pradhan Mantri Jan Dhan Yojana, basic savings bank deposit account, and accounts of pensioners and minors, among others. My outgo on the ATM card itself is Rs 1,500 crore annually.

AMB charges are levied by private banks too.

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