The country's largest lender's penalty on customers for non-maintaining minimum balance is much less than its private sector peers, though.
The nation's largest bank, State Bank of India has made a massive cut in the non-maintenance of Average Monthly Balance (AMB) in savings accounts by almost 75 per cent.
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. "Bank also offers its customers to shift from regular savings bank account to BSBD account on which no charges are levied", said PK Gupta, MD, SBI. The AMB for accounts from metro areas was set at Rs5,000 and those from urban areas at Rs3,000.
The Bank also provides the option of converting the regular savings bank account to Basic Savings Bank Account (BSBD account), free of charge. If you maintain a minimum balance of less than 50% in metro cities, at present you have to give 30 rupees plus GST of 5.4 rupees. Later in October, the bank had revised down the charges to some extent.
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This choice takes extreme feedback that the bank earned strong pay of Rs 1,771 crore in only 8 months from contributors who neglected to keep up the balance in their bank accounts.
The move will eat into the fee income of the bank, which had reported the first quarterly loss in 20 years, as it had to make huge provisions for bad loans. The Bank has an exceptionally solid store establishment having 41 crores Savings Bank accounts out of which 16 crore accounts under PMJDY/BSBD and of beneficiary/minors/standardized savings advantage holders were at that point exempted. However, the minimum amount to be maintained in the account remains the same.
In this case, the SBI Bank has replaced the penalty again. SBI had brought back this requirement for its savings accounts in April 2017, after a gap of 6 years. The bank had subsequently lowered the AMB, following criticism from the customers. Besides, it has unveiled a Rs 2.11 lakh crore recapitalisation plan. Currently, the charges are in the range of Rs20-40.
According to the release, the reduced rates will benefit 25 crore customers.