State Bank of India (SBI) charges for non-maintenance of minimum balance unfair

According to financial ministry data, the SBI collected Rs 24.34 billion for the financial year 2017 in penalty on non-maintenance of minimum balance alone.

Finance News: The State Bank of India’s (SBI’s) charges for the non-maintenance of minimum balance were unreasonable, a report by a professor at the Indian Institute of Technology-Bombay has said.

The SBI started charging fees for non-maintenance of minimum balance from April 2017, after a gap of five years, the monthly fees ranged between Rs 20 and Rs 100 till September 2017 and were later slashed in October last year. According to financial ministry data, the SBI collected Rs 24.34 billion for the financial year 2017 in penalty on non-maintenance of minimum balance alone.

SBI Minimum Balance Penalty

Later on, the bank slashed these charges by nearly 80 per cent in April 2018, and the charges currently range from Rs 5-15.

The public sector lender had earlier said that only 60 per cent of its accounts were subject to these charges. It also said that people should convert their accounts in Basic Savings and Basic Deposit Accounts to avoid penalty for non-maintenance of balance.

“For April 2017, the SBI recovered Rs 2.35 billion as penalty from only 38.9 million of the 255 million savings bank accounts in question for not maintaining minimum monthly average...continue balance

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News Source: BS

SBI slashes penalty for not maintaining minimum balance from Rs 50 to Rs 15

The charges for non-maintenance of AMB for customers in metro and urban centres have been reduced from a maximum of Rs 50 per month to Rs 15, excluding GST.

Business News India : SBI on Tuesday said that it has reduced the penalty for non maintenance of the stipulated average minimum balance (AMB) in a customer’s account.

The charges for non-maintenance of AMB for customers in metro and urban centres have been reduced from a maximum of Rs 50 per month to Rs 15, excluding GST.

Similarly, the charges for semi-urban and rural centres have been revised from Rs 40 to Rs 12 and Rs 10 respectively.

The bank, in a press release, said the cut in fines will benefit 250 million account holders out of its 410 million savings account holders.

The breakdown of previous and new charges are as follows:

SBI made Rs 18 bn on charges:

The largest Indian bank suffered a huge backlash last December when finance ministry data revealed that it netted a windfall of Rs 17.72 billion, more than its second-quarter profit, from customers for non-maintenance of monthly average balance in savings accounts in eight months of 2017-18.

While SBI’s current Rs 3,000 minimum balance requirement for urban areas is highest among all PSBs, it is the lowest compared to all large private banks.

State Bank of India has close to 405 million savings account customers. SBI, after a gap of six years, had reintroduced the monthly average balance (MAB) charges from April 1, 2017.

After criticism by customers, it reduced those charges with effect from October 1, 2017.

→ SBI Minimum Balance Penalty ←

SBI’s New Year gift: Base rate cut by 30 bps, home loan fee waiver extended

Eight million customers to gain from move designed to reward loyalty

 

In a surprising move at the start of the year, State Bank of India (SBI) reduced its base rate and benchmark prime lending rates (BPLR) for existing customers by 30 basis points each effective from January 1.

One basis point is a hundredth of a percentage point.

The bank said it would also extend its ongoing waiver on home loan processing fee till March 31 for new customers and for customers switching their loans from other banks to SBI.

Though all new customers are offered the marginal cost-based lending rate (MCLR), a large chunk of retail customers — especially on the home loan side — as well as old corporate loans, are still in the base rate system.

About 8 million customers would benefit from this move, said P K Gupta, managing director (retail and digital banking), SBI.

The revised base rate for the bank is now 8.65 per cent, while the BPLR is 13.40 per cent. The base rate is the minimum a bank can offer to its customers.

“The reduction in the base rate is a New Year gift to the bank’s loyal customers, as a large number of consumers who have their loans linked to the base rate will benefit. This reduction is part of the bank’s efforts to ensure transmission of the reduction in policy rates of the recent past,” Gupta said.

A HAPPY NEW YEAR FOR BORROWERS…

• SBI’s revised base rate is now at 8.65%, while BPLR is now 13.40%
• 1-year MCLR stands unchanged at 7.95%
• About 8 mn customers will benefit by the base rate cut
• Move expected to be followed by other banks
• SBI to also extend waiver on home loan processing fee till March 31

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RBI may be holding back Rs 2,000 notes or stopped printing them

High-value notes worth Rs 2.46 lakh cr not released, says the report

 

The Reserve Bank of India (RBI) may either be holding back Rs 2,000 notes or could have stopped printing high denomination currency, says a SBI Research report.

Juxtaposing the data presented in the Lok Sabha recently with the one provided by RBI in its Annual Report earlier, the SBI Ecoflash report said today, “we observe” that the value of small denomination currency in circulation up to March 2017 was Rs 3,501 billion.

This implies that the value of high denomination notes was equivalent to Rs 13,324 billion as on December 8, after netting out the small denomination notes from the currency in circulation on that day, it said.

The report further said that as per the Ministry of Finance in the Lok Sabha recently, the RBI has printed 16,957 million pieces of Rs 500 notes and 3,654 million pieces of Rs 2,000 notes as on December 8. The total value of such notes translates into Rs 15,787 billion.

“This means that the residual amount of high currency notes (Rs 15,787 billion Rs 13,324 billion) of Rs 2,463 billion may have been printed by the RBI but not supplied in the market,” said the report authored Soumya Kanti Ghosh, group chief economic adviser, SBI.

Interestingly, the report added, “it is safe to assume” that Rs 2,463 billion may be on the lower side as the RBI must have printed notes of small denomination in the interregnum (Rs 50 and Rs 200).

“As a logical corollary, as 2000 denomination currency led to challenges in transactions, it thus indeed seems that RBI may have either consciously stopped printing the 2000 denomination notes/or printing in smaller numbers after initially it was printed in ample amount to normalise the liquidity situation,” said Ecoflash.

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SBI to hide PAN info on tax refund envelopes after activist raises concerns

Activist Batra wrote to Urjit Patel, alleging that SBI was violating its directions on ‘protection of customer’s information’ by sending crucial information.

Income tax News : State Bank of India will “redesign” its envelopes used to dispatch tax refund cheques of customers to cover their PAN and contact numbers, after an activist raised that the crucial personal information was visible to anyone which may result in misuse, the bank said.

The move comes nearly 16 months after activist Commodore (retd) Lokesh Batra raised the issue that the window envelopes used by SBI make it easy for someone to glance through permanent account number (PAN) and contact number of the tax payee and misuse it.

Batra wrote to Reserve Bank of India (RBI) Governor Urjit Patel, alleging that SBI was violating its directions on ‘protection of customer’s information’ by sending crucial information about customers in “unsecured envelopes”.

“…this systemic failures by banks must be breaching the personal information of very large numbers of People. I had reported this matter at the highest level in SBI…, but as of now no one has even blinked…and breaching of people’s personal information is continuing,” he wrote to the RBI Governor on November 28.

He said he had been “pleading” with SBI at the highest level for the past 16 months to ensure compliance with RBI directions, but nothing has changed.

Click to Read → Permanent Account Number

HDFC too matches SBI, ICICI's home loan rates at 8.35%

In HDFC, new rates are applicable up to limit of Rs 30 lakh

 

Breaking News : The war for attracting customers for Affordable housing loans intensified on Monday after ICICI Bank and HDFC Ltd. reduced their interest rates by up to 0.3 per cent for loans of up to Rs 30 lakh to promote affordable housing.

New home loans rates for up to Rs 30 lakh for women will be 8.35 per cent and for other others, 8.40 per cent, mortgage lender HDFC Ltd said in a statement.

For home loans above Rs 75 lakh it is now 8.55 per cent, from 8.75 per cent for all, it said. The new rates are effective from Monday and are expected to be followed other lenders as well.

Earlier in the day, the country’s largest private sector lender, ICICI Bank too reduced interest rates by up to 0.3 per cent for home loans up to Rs 30 lakh in its bid to boost affordable housing. With this reduction, salaried borrowers can avail home loans at among the lowest rates in the industry, the country’s largest private sector lender said.

Salaried women borrowers will get home loans at 8.35 per cent and others at 8.40 per cent, it said.

Last week, State Bank of India (SBI) had reduced its affordable home loan rates by up to 25 basis points, offering a lower rate of 8.35 per cent to new women borrowers (read more...)

Debit card scare: Why you need to change the ATM PIN immediately

Recently, many customers have got mails and messages from their banks to change the ATM PIN of their debit cards. We now know the reason, with reports suggesting 3.2 million accounts in five leading banks -- State Bank of India, Axis Bank, ICICI Bank, HDFC Bank and YES Bank -- are compromised.

Bankers and cyber experts advise that ideally an ATM PIN should be changed every three to six months. Are they being overly cautious? Perhaps not. Several banks have already asked their customers to change their card security details and to stick to own ATM networks.

An ATM breach means the PIN numbers of not only that bank’s customers but all those who use that bank’s ATM network could be compromised.

“Once the malware is detected, the bank or payment services company will fix it but the problem is to identify the malware. While such incidents are common overseas, they are increasingly happening in India, too, as banks adopt more technology and transactions become digital. There is a need to be more pro-active and put the proper checks in place,’’ Khurana adds.

“While we have leapfrogged in digital technology, we still lag in digital security. Both banks and customers need to actively protect themselves. Going ahead, customers may ask a bank about its digital security and protection before opening an account and not only about services and rates. For banks, it is a question of their reputation,’’says Piyush Singh, Managing Director, Financial Services, Accenture India.

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SC asks banks to respond to Mallya's plea against contempt notice

The Supreme Court on Monday asked the consortium of banks led by the SBI to respond to beleaguered liquor baron Vijay Mallya's plea seeking recall of the notice of contempt for allegedly not making full disclosure of all the assets owned by him and his family as directed by the top court earlier.

Giving 10 days time to the State Bank of India (SBI) to file its response, the bench of Justice Kurian Joseph and Justice Rohinton Fali Nariman gave Mallya a week's time to file his rejoinder as it directed the hearing of the matter on September 27.

Mallya's lawyer said the liquor baron has contended that the disclosure of the assets was for the settlement of outstanding dues with the banks, and since no settlement was taking place, he was not obliged to make disclosure and consequently there was no contempt.

Contesting the allegation that he had not made full disclosure of his assets, Mallya, now residing in London, said that the disclosures made by him about his assets and liabilities, submitted to the court in a sealed cover on March 31, were "accurate" and were meant for lending banks to have a "fair idea" for a  read more..