India’s largest bank the State Bank of India will resume charging its customers who don’t maintain monthly account average balance in their savings account. This new system will be implemented from starting of the financial year, i.e., from 1st April 2017. The fine chargers will be mentioned based on the difference between required minimum balance and the shortfall of respective SBI accounts.
According to the SBI bank instructions, the minimum balance required for savings account holders is Rs. 5,000 in metropolitan areas. Similarly, in the urban areas, the customers need to maintain the average monthly balance should be Rs. 3,000. While in semi-urban areas, people have to maintain a minimum balance of Rs. 2000 and in rural areas, the monthly average of Rs. 1000.
A senior SBI executive said the bank had, at present, 250 million savings accounts. “Since Prime Minister announced demonetisation of old Rs 500 and Rs 1,000 notes on November 8 last year, the bank had initiated a large number of savings accounts especially till end-December.”
For metropolitan areas, if the average monthly balance is above 75 percent the fine charges mentioned is Rs. 100 along with service tax. While in urban areas if the shortfall of MAB is less than 50 percent the amount to pay is Rs. 50 percent and service tax. Similarly, if the shortfall is between 50 and 75 percent then have to pay Rs. 60 along with service tax and if it is between 75 percent have to pay the charge of Rs. 80 and service charge.
The executive also added, “Managing these SBI accounts, including those with zero balance, includes expenses such as running operations and systems. It is also an effort to stem an outflow of money from savings accounts, mainly those opened recently.”
SBI has implemented this minimum balance payment system for the savings account in the year 2012 in July in a bid to lure customers. As per the reports, the bank is going to merge five associate banks of itself and thus acquires 50 crore customers. The bank also reduced the interest rates on term deposits from 180 days to one year and 456 days to three years from 1st March 2017.