SBI may cut minimum balance requirement to Rs 1,000 in urban areas
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The State Bank of India may reduce its minimum balance requirement to Rs 1,000 from the current Rs 3,000 balance in metros, according to a report in the Economic Times.
The largest Indian bank suffered a huge backlash last week when finance ministry data revealed that it netted a windfall of Rs 17.72 billion, more than its second-quarter profit, from customers for non-maintenance of monthly average balance in savings accounts in eight months of 2017-18.
While SBI's current Rs 3,000 minimum balance requirement for urban areas is highest among all PSBs, it is the lowest among all large private banks.
State Bank of India has close to 405 million savings account customers.
SBI, after a gap of six years, had reintroduced the monthly average balance (MAB) charges from April 1, 2017.
After criticism by customers, it reduced those charges with effect from October 1.
"On an average balance of Rs 3,000 in metro, SBI earns Rs 6 only per month whereas for a minimum balance of Rs 1,000 in rural, bank earns Rs 2 per month which is meagre when compared to the services offered and corresponding costs incurred by the bank (free chequebook, 8 free ATM transactions, free branch transactions)," the state-owned lender said in a statement.
The finance ministry data showed the bank charged Rs 17.71 billion from customers on account of non-maintenance of minimum average balance between April and November 2017.
The charges collected by SBI for non-maintenance of minimum balance exceeds the bank's July-September quarter net profit of Rs 15.81 billion. The amount was also nearly half of the Rs 35.86 billion the bank earned as net profit from April to September.
"We would like to clarify that savings bank accounts such as Prime Minister's Jan Dhan Yojna (PMJDY), Small accounts and Basic Savings Bank Deposit (BSBD) accounts, Pensioners, minors and all social beneficiary accounts are exempted from MAB requirement and no charges ever have been recovered," SBI said.
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