SBI claims the lowest average monthly balance for SB accounts
Posted on: 09/Aug/2018 12:11:49 PM
State Bank of India, one of the biggest state-run banks of the nation announced the reduction of charges in maintaining the minimum balance and also for the collection of penalty charges for not maintaining the threshold balance. Average Monthly Balance (AMB) for SBI in metro, rural and urban areas is Rs 3,000 marking the 40 percent decrease in the amount by the time April 2018.
SBI claims that the banking body collects the lowest amount among other competitors of banking sector in terms of charges for the non-maintenance of average monthly balance. According to a latest report from SBI the bank supposedly collected Rs 2,433 crore as penalty in the year 2017-18. Accounting all the 21 state-run banks combined with three major private bankers, total charges collected as penalty is Rs 5,000 crore for the year 2017. The data shows that the half percent of the total penalty charges was collected by SBI followed by the bank’s official announcement about the revised plan for the non-maintenance of minimum balance and AMB as of April 1, 2017.
Effective from April 2018 the State Bank of India reduced the average monthly balance up to 40 percentage resulting from the high demand of stakeholders. Also the bank reduced the penalty amount for non-maintenance of AMB up to 70 percent from the old charges. Further a five percent decrease was offered for the banks in the rural sector.
Account holders of Pradhan Mantri Jan-Dhan Yojana, Basic Savings Bank Deposit (BSBD), Social Security benefit holders, Pensioners and minor account are exempted from the average monthly balance. Out of 42.5 crore savings bank accounts of SBI forty percent fall under the exempted category. Customers can easily convert their savings account to BSBD accounts without any charges. But there are certain restrictions in the transaction and basic operations of such exempted accounts.
For urban branches of AMB the average monthly balance is Rs 3,000, semi-urban branches categorized to Rs 2,000 and rural branches with only Rs 1,000. Percentage of shortfall and the extent factors determines the penalty charges for not maintaining the minimum balance requirements. Along with GST Rs 10 and Rs 15 charged as a penalty for urban branches of SBI, Rs 7.50-12 for semi urban branches and Rs 5-10 in rural branches.
