Here are 10 things you must know about SBI's review of minimum balance requirement:
1. "A review of the monthly average balance is something we've been looking at continuously since we had brought it back in April and we have already brought it down in October a bit. Now we are in the process of reviewing it again," said SBI's managing director for retail and digital banking, PK Gupta.
2. Mr Gupta said that SBI is doing a comprehensive review of the minimum account balance requirement and penalty for non-maintenance of the same, based on the feedback it has received and will soon announce it.
3. Effective October 1, 2017, SBI customers holding savings bank accounts in metro and urban branches are required to maintain a monthly average balance of Rs 3,000, according to the SBI website. Customers in semi-urban SBI branches are required to maintain a monthly average of Rs 2,000. Those holding SBI savings bank account in rural branches are required to keep a minimum monthly balance of Rs. 1,000. This amount is also kept unchanged from previously applicable rates.
4. SBI had recently said that 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).
5. From October 1, 2017, SBI revised its minimum account balance criteria applicable to savings bank accounts, according to its website. A penalty amount ranging from Rs. 20 to Rs. 50 (both amounts exclusive of GST or goods and services tax) is chargeable for non-maintenance of sufficient balance as per the bank's minimum account balance rules.
6. SBI had reintroduced monthly average charges from April 1, 2017, but had to revise downwards the penalties for non-maintenance of the minimum balance from October 1, after facing backlash from customers.
7. 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 minimum average balance requirement, said SBI.
8. SBI earned Rs. 1,771 crore as charges for non-maintenance of minimum balance between April-November, which was not only more than its September quarter net profit of Rs. 1,581.55 crore but is also nearly half of the Rs. 3,586 crore it earned as net profit during the April-September period.
9. SBI has always provided customers an option to convert their existing savings accounts to basic savings bank deposit account free of cost, it said earlier.
10. SBI has close to 40.5 crore savings bank accounts. (With PTI Inputs)