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

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Mumbai: State Bank of India (SBI) is in the process of comprehensively reviewing the requirement for minimum balance in savings account and the charges applicable for non-maintenance, and will soon make the announcement, said managing director Praveen Kumar Gupta.

SBI was followed by Punjab National Bank which recorded the collection of Rs 97.34 crore during the April-November period.

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.

The development comes after the finance ministry flagged off the issue of profits public sector banks made by charging penalty for non-maintenance of monthly minimum balance.

According to ET sources, the bank is looking at bringing down the MAB to Rs 1,000 but is yet to take a call.

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The bank recently said on an average balance of Rs 3,000 in the metros, SBI earned only Rs 6 a month whereas for a minimum balance of Rs 1,000 in rural, it earned on Rs 2 per month which is meagre compared to the services offered and the corresponding costs incurred by the bank (free cheque books, 8 free ATM transactions, free branch transactions).

The customer can now maintain quarterly average balance (QAB) instead of monthly average balance, the statement isssued earlier said.

The MAB for urban SBI customers remains unchanged, as does the penalty for its non-maintenance. According to the ministry, SBI earned Rs 1,771 crore in the first eight months of 2017-18 fiscal year. The MAB for accounts from metro areas was set at Rs5,000 and those from urban areas at Rs3,000. It also slashed charges from 20-50% for non-maintenance of MAB across all population groups and categories.

In metropolitan areas, there will be a charge of Rs 100 plus GST, if the balance falls below 75 per cent of the MAB of Rs 5,000. Exempted accounts are those related to Pradhan Mantri Jan Dhan Yojana, basic savings bank deposit account, and pensioners and minor accounts, among others.

Federal Bank officials told Mathrubhumi that accounts that require no MAB are available for depositing pensions and scholarships.