SBI cuts fee for not maintaining minimum balance by up to 75%
MUMBAI: State Bank of India (SBI) on Tuesday decided to slash by as much as 75% the charges it levies on savings bank account holders for failing to maintain the average monthly balance (AMB), bowing to criticism that it is generating income by levying such fees on poor account holders.
The new charges are applicable from April 1. The lender has, however, left the minimum balance amount that has to be kept by account holders unchanged.
For customers in urban areas, the applicable charge for not maintaining the average minimum balance of ₹3,000 have been cut to ₹10-15 starting April 1 from ₹30-50 now. Within a particular category, the bank levies charges depending on the shortfall.
For instance, if the shortfall is greater than 75%, charges applicable would be ₹15 as compared to ₹50 earlier. Applicable goods and service tax (GST) is added to the charges. SBI has also slashed charges for non-maintenance of ₹2,000 as ABM in bank accounts in semi-urban areas to ₹7.50-12 and ₹1,000 in accounts in rural area to ₹5-10. Currently, the charges are in the range of ₹20-40.
P K Gupta, managing director, retail and digital banking at SBI, said the bank has reduced the charges on the basis of customer feedback. SBI claims the reduction is expected to benefit 250 million customers.
The state-owned lender has around 410 million savings bank accounts, of which around 160 million are exempted from AMB requirement. Exempted accounts are those related to Pradhan Mantri Jan Dhan Yojana, basic savings bank deposit account, and accounts of pensioners and minors, among others.
In April 2017, SBI had re-introduced the requirement for maintaining AMB and imposed penalties for non-maintenance after six years. The AMB for accounts from metro areas was set at ₹5,000 and those from urban areas at ₹3,000. The bank had subsequently lowered the AMB, following criticism from customers.
SBI collected ₹1,771.67 crore from customers on account of non-maintenance of AMB between April and November 2017, according to the finance ministry’s answer in Lok Sabha on December 29.