There is a likelihood of SBI slashing down the minimum balance requirement for savings accounts to the extent of 70 per cent which is at present Rs. 3000 for metros, Rs. 2000 for semi urban and Rs. 1000 for rural areas. Also, the mandate for maintenance is likely to be changed to quarterly from monthly requirement.
After the negative news on the income generated on the fees, the bank is looking at reducing the minimum balance requirement to around Rs. 1,000 but is yet to take a call. SBI saw backlash after finance ministry data showed that the public sector lender netted a windfall of Rs 1,771.67 crore as penalty from customers for non-maintenance of monthly average balance in savings accounts in eight months of 2017-18 from April to November 2017. Also the Bank among top 50 global banks, had posted a net profit of Rs 1,581.55 crore in the quarter ended September 2017. It may be noted that SBI has close to 40.5 crore savings account customers.
From April 1, 2017, after a gap of six years, SBI had reintroduced the monthly average balance charges. After criticism, it reduced the charges with effect from October 1.
So far, it requires its savings bank account holders to maintain certain minimum balance every month. The bank has specified different monthly average balances (MAB) for accounts held in different types of branches which are metro, rural, urban and semi-urban. Non maintenance of the required monthly average balance or minimum balance in SBI’s savings bank accounts attracts a penalty. The amount of penalty depends upon the degree of shortfall. In other words, the farther you are from the required minimum balance, the bigger amount you have to pay as penalty being an SBI customer.
SBI under special type of bank accounts such as Pensioners’ accounts, Social Welfare Benefits accounts and Basic Savings Bank Accounts, doesn’t require maintenance of any specific monthly average balance. Below are the charges at present:
Metro areas — Rs 3,000
- If balance falls between Rs 2,999 and Rs 1,500, the account holder will have to pay Rs 30 as penalty.
- Balance betwen Rs 1,499 and Rs 750 will attract penalty of Rs 40
- Below Rs 750 would attract fine of Rs 50.
- Prior to October 2017, the penalties for these three stages were Rs 50, Rs 75 and Rs 100 respectively.
Semi-urban areas — Rs 2,000.
- Non-maintenance of balance between Rs 1,999 and Rs 1,000 will be charged fine of Rs 20
- Balance between Rs 999 and Rs 500 — Rs 30 fine
- Less than Rs 500 — Rs 40 as fine.
Rural areas — RS 1000
- Balance between Rs 999 and Rs 500 — Rs 20
- Balance between Rs 499 and Rs 250– Rs 30
- Balance at Rs 249 or less — Rs 40.
High charges by banks
Recently, as per reports, a study by an IIT-Bombay professor has claimed that public sector as well as private banks have been imposing unreasonable charges on customers for failing to maintain minimum balances in their savings accounts. It reads “With many banks charging at an average high rate of 78 per cent per annum of the shortfall amount, it makes the whole regulation of reasonableness of charges as per cost quite shallow”.
The study conducted by a professor of statistics, Ashish Das, showed that some banks like Yes Bank and Indian Overseas Bank have been imposing penal charges of over 100 per cent per annum on shortfall in maintenance of minimum balance in customers accounts.
Source by moneycontrol.