SBI looks at revising downwards min balance amount, penalty

Source: The Hitavada      Date: 06 Jan 2018 09:04:26


MUMBAI,

Jan 5,

(PTI),

SBI on Friday said it is looking at revising minimum balance amount and penalty charges in the wake of all-round criticism for raking in a windfall profit of over Rs 1,771 crore from customers in penalty for non- maintenance of monthly average balances in their savings accounts. The country’s largest lender which has over 402 million savings account holders, had reintroduced monthly average balance (MAB) charges from April 2017 after a gap of five years. Accordingly, the bank demands Rs 5,000 in MAB in metros and Rs 1,000 in rural accounts, failing which it charges a penalty.

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.  “A review of the monthly average balance is something we’ve been looking at continuously since we had brought it back in April and we have already brought it down in October a bit. Now we are in the process of reviewing it again,” MD for retail and digital banking PK Gupta told reporters here on Friday. He said the bank is doing a comprehensive review of the MAB and penalty for non-maintenance of the same, based on the feedback it has received and will soon announce it.

Currently, the bank has a MAB of Rs 3,000 for the metro and urban accounts and the non-maintenance penalty varies Rs 30-50 plus taxes. For semi-urban and rural branches, the amount is fixed at Rs 2,000 and Rs 1,000, respectively and the penalty for non-maintenance is in the range of Rs 20-40 plus taxes.SBI has close to 40.5 crore saving bank account customers. SBI had reintroduced monthly average charges from April 1, 2017, but had to revised downwards the penalties for non-maintenance of the minimum balance from October 1, after facing backlash from customers.