State Bank of India, the country's largest bank, has decided to increase manifold the minimum balance required for maintaining savings account from 1 April, sparing the Jan Dhan accounts or 'Basic Savings Bank' accounts. However, media reports also said the government has asked the bank to reconsider its decision.
The monthly average balance (MAB) requirement has been increased to as high as Rs 5,000 for branches in six metros, according to a PTI report.
Savings bank account holders of SBI and its five associates (merging with it on 1 April) will have to maintain the monthly balance or else they will invite a penalty ranging from Rs 20 (rural branches) to Rs 100 in (metro cities).
SBI has 31 crore savings bank accounts.
As of now, monthly average balance (MAB) for a savings bank account is Rs 500 without facility of cheque book and Rs 1,000 with cheque book across the country.
India's largest bank has now decided to fix separate MABs for 'metro', 'urban', 'semi-urban' and 'rural' areas from the beginning of next financial year.
However, according to a report in The Times of India the bank will not apply the condition on the Prime Minister's Jan-Dhan Yojana (PMJDY) accounts or to the 'Basic Savings Bank' accounts.
"This does not apply to any financial inclusion account. All banks as far as we are aware already have such charges," said bank chairman Arundhati Bhattacharya has been quoted as saying in the report.
The benchmark for MAB and penalties are likely to be followed by other public sector banks.
MAB for metro branches will be Rs 5,000 and penalty for non-maintenance of minimum balance will be between Rs 50 and Rs 100. For urban and semi-urban branches, the MAB has been fixed at Rs 3,000 and Rs 2,000 respectively.
In case of rural branches, the minimum balance has been fixed at Rs 1,000. Breach of MAB will attract a penalty ranging between Rs 20 and Rs 50.
Five associates banks of SBI -- State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH) -- will merge with the parent on April 1.
With the merger of all the five associates, SBI is expected to become a lender of global proportions with an asset base of Rs 37 trillion (Rs 37 lakh crore) or over $555 billion, 22,500 branches and 58,000 ATMs. It will have over 50 crore customers.
However, another PTI report said the government has asked SBI to reconsider its decision to levy penalty on non-maintenance of minimum balance.
State Bank of India, according to a source, has also been asked to reconsider charges it proposes to levy on cash transactions and ATM withdrawals over specified limits.
"Government has asked SBI to reconsider it's decision to impose a penalty on non- maintenance of minimum balance in accounts from April 1 onwards," the source told PTI.
The government has also urged SBI and other lenders, including private sector banks to "reconsider the charges on cash transactions and ATM withdrawals above a certain limit".
Some private banks, like HDFC Bank, ICICI Bank and Axis Bank, have started charging a minimum amount of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.
With inputs from PTI
Published Date: Mar 07, 2017 09:45 am | Updated Date: Mar 07, 2017 10:14 am