The State Bank of India, country’s largest public sector lender, may again cut minimum balance requirement for savings bank account customers. At present, the bank has set Rs 3,000 as minimum balance limit for account holders in a metro city branch, according this Economic Times report.
In June 2017, the bank had changed minimum balance maintenance criteria citing loads of work on its staff and excess liquidity in banks in the aftermath of demonetisation on 8 November, 2016.
At that time, it had fixed Rs 5,000 as minimum balance limit for metro city customers, Rs 3,000 for urban, Rs 2,000 for semi-urban and Rs 1,000 for rural customers. As a result, the bank drew flak from various quarters as the amount that the bank fixed was much higher and for some customers it was unaffordable.
After the government expressed its dismay over the new minimum average balance (MAB) rule, the bank in its explanation said that it was necessary to increase the minimum balance limit as, according to the bank, it was not making much profit from these accounts. On top of that, the services it offered to maintain these accounts cost more than that, the SBI had said back then.
The bank reintroduced MAB rules after a long gap of five years. Last time, it came up with any such norm was in 2012. It is also reported in the ET report that instead of charging for non-maintenance of monthly minimum balance, the bank was planning to bring in a totally different mechanism – a quarterly minimum balance rule.
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 the ministry, SBI earned Rs 1,771 crore in the first eight months of 2017-18 fiscal year.
It may be noted that that the SBI garnered through fines was more than lender’s net profit of Rs 1,581.55 crore in July-September quarter and nearly half of the Rs 3,586 crore profit in April-September period.
Published Date: Jan 05, 2018 14:45 PM | Updated Date: Jan 05, 2018 14:45 PM