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

---

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 ←