SBI may cut minimum balance requirement to Rs 1000 in urban areas

SBI collected Rs1,771.67 crore from customers on account of non-maintenance of minimum average balance between April and November 2017

PSU banks have reportedly collected Rs 2320.96 crore in FY18 by imposing a penalty on customers who do not maintain their minimum monthly average balance (MAB).

As a result, between April and November 2017, the bank had netted a windfall of Rs 1,771.67 crore, which is more than its second-quarter profit, as penalties from customers for non-maintenance of MAB, finance ministry data showed.

When asked if reduction of monthly average balance (MAB) is on the cards, Gupta said SBI has got some feedback on the same and the bank will take a view on the same in the review.

It may be noted that that the SBI garnered through fines was more than lender's net profit of Rs 1,581.55 crore in July-September quarter and almost half of the Rs 3,586 crore profit in April-September period.

SBI now charges penalty from customers for non-maintenance of monthly average balance in savings accounts. The amount was also almost half of the Rs 3,586 crore the bank earned as net profit from April to September.

SBI has close to 40.5 crore saving bank account customers. Customers in the metro and urban centres will now have to maintain average Rs 1,000 during the quarter compared to Rs 3,000 average on a monthly basis. According to the bank's revised charges, the charges are Rs 100 plus taxes.

After the government expressed its dismay over the new minimum average balance (MAB) rule, the bank in its explanation said that it was necessary to increase the minimum balance limit as, according to the bank, it was not making much profit from these accounts. Customers will have to pay GST over and above the fine they have incurred. For rural areas, the penalty ranges from Rs 20-50 plus service tax. SBI account holders in urban regions of the country will have to maintain Rs 3,000 as monthly average balance, as before. Exempted accounts are those related to Pradhan Mantri Jan Dhan Yojana, basic savings bank deposit account, and pensioners and minor accounts, among others. It also slashed charges from 20-50% for non-maintenance of MAB across all population groups and categories.

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