SBI lowers minimum balance to ~3,000

The country’ s largest lender, State Bank of India, on Monday lowered the minimum average monthly balance( MA B) requirement in a savings account to ~3,000, from ~5,000, and also revised down wards penalties for non-adherence. TherevisedMAB requirement and charges would become applicable from October, the bank said.

The country’s largest lender, State Bank of India (SBI), on Monday lowered the minimum monthly average balance (MAB) requirement in a savings account to ~3,000, from ~5,000, and also revised downwards penalties for non-adherence.

The revised MAB requirement and charges will become applicable from October, the bank said in a statement.

The public sector lender also decided to exempt pensioners, beneficiaries of social benefits from the government, and minors from the requirement of minimum balance in savings account.

In April, the bank had reintroduced MAB and charges for non-maintenance of balance after a gap of five years.

In metropolitan areas, the minimum balance requirement was ~5,000. For urban and semi-urban branches, it was fixed at ~3,000 and ~2,000, respectively, and for rural branches, it was ~1,000.

“We have decided to treat the metro and urban centres in the same category and the requirement of MAB in metro centres stands reduced to ~3,000,” the bank said.

Last week, managing director for national banking group, Rajnish Kumar, had said the lender was reviewing the average monthly balance requirement. The lender also revised downwards the penalty for non-maintenance of MAB.

“For non-maintenance of MAB, the charges have also been revised downwards ranging from 20-50 per cent across all population groups and categories,” the bank said.

Now, the charges at semiurban and rural centres range from ~20 to ~40 and at urban and metro centres from ~30 to ~50, the bank said.

Earlier, in the metros, the bank was charging ~100 plus GST (goods and services tax) if the balance fell below 75 per cent of the MAB of ~5,000. If the shortfall was 50 per cent or less, the penalty charge was ~50 plus GST.

Any shortfall in maintaining MAB in rural areas was attracting a penalty in the range of ~ 20 to ~50 plus GST. The bank reiterated that basic savings bank deposit and Prime Minister’s Jan-Dhan accounts are not required to maintain the minimum balance. The lender has 420 million savings bank accounts, of which 130 million belong to this category.

“It has now been decided to exempt the pensioners, beneficiaries of social benefits from the government and accounts of minors. The revision is likely to benefit another 50 million account holders," the bank said.