New Delhi: Country’s largest lender State Bank of India (SBI) on Tuesday reduced the minimum balance charges for non-maintenance of average minimum balance by up to 75 percent.
Charges for non-maintenance of average minimum balance in Metro and Urban centres have been reduced from maximum of Rs 50 per month plus GST to Rs 15 per month plus GST.
For Semi-Urban and Rural centres charges have been reduced from Rs 40 per month plus GST to Rs 12 and Rs 10 per month plus GST respectively.
The new rates on minimum balance charges will be effective from April 1, 2018.
SBI currently charges penalty from customers for non-maintenance of monthly average balance in savings accounts. The rates of monthly average balance is Rs 3,000 for metros, Rs 2,000 for semi-urban areas and Rs 1,000 for rural areas.
The SBI, after a gap of six years, had reintroduced the monthly average balance (MAB) charges from April 1, 2017.
SBI’s plan to reduce the minimum balance requirement reportedly comes after the negative news on the income generated on the fees.
A finance ministry data, released in early January, showed that SBI netted a windfall of Rs 1,771.67 crore, more than its second-quarter profit, from customers for non-maintenance of monthly average balance in savings accounts in eight months of 2017-18.
The finance ministry data showed the bank charged Rs 1,771.67 crore from customers on account of non-maintenance of minimum average balance between April and November 2017.
The charges collected by SBI for non-maintenance of minimum balance exceeded the bank’s July-September quarter net profit of Rs 1,581.55 crore. The amount was also nearly half of the Rs 3,586 crore the bank earned as net profit from April to September.