India's largest lender bank State Bank of India reduced its charges on non-maintenance of Average Monthly Balance (AMB) in savings accounts by almost 75 percent.
The bank today reduced the charges for non-maintenance of AMB in the metros and urban centres from a maximum of Rs 50 per month plus taxes at 18 percent to Rs 15 a month and taxes. The bank has reduced the charges by up to 75% in different categories of savings account, after taking in feedback from various stakeholders. The minimum balance for SBI savings accounts are Rs 3,000 for accounts in the Urban and Metro areas. The revised charges will be viable from April 01, 2018 and will profit more than 25 crore clients. SBI has announced that it will benefit over 25 crore customers.
After a revision past year, customers from urban centres are required to maintain a balance of Rs 3,000, while it is Rs 2,000 and Rs 1,000 for semi-urban and rural centres respectively.
SBI has also slashed charges for not-maintenance of Rs2,000 as ABM in bank accounts in semi-urban areas to Rs7.50-12 and Rs1,000 in accounts in rural area to Rs5-10. Earlier, SBI reduced the limit of the minimum balance from 5000 to 3000 rupees for metro cities. "Bank also offers its customers to shift from regular savings bank account to BSBD account on which no charges are levied", P.K. Gupta, managing director, SBI, said in a statement.
RBI guidelines mandate that charges for non-maintenance of minimum balance in savings bank accounts be "reasonable".
Of the 41 crore savings accounts, 16 crores are under the Pradhan Mantri Jan Dhan Yojana (PMJDY)/BSBD and of the pensioner, minors, social security benefit holders which are all exempted from the penalty for not maintaining of the minimum balance.
Including SBI, other banks across the country also charge penalties if there are not enough funds in the account. Currently, the charges are in the range of Rs20-40.
However, it needs to be noted that, the customer can not have any other Savings Bank Account, if he/she has a BSBD Account. "But it can't work this way that everything comes free", Kumar said.