SBI advises customers to shift to ‘basic account’ to avoid maintenance charges
07 Aug 2018
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State Bank of India (SBI) has advised customers that conversion of savings bank (SB) accounts to basic savings bank deposit (BSBD) accounts would help avoid penalty for not maintaining average monthly balance (AMB).
For this, however, only accounts such as PMJDY/BSBD, pensioners/ minors/ social security benefit holders that are exempt from the average minimum balance (AMB) requirement, are eligible, the bank clarified.
The bank’s clarification comes in response to reports about the over Rs11,500 crore that banks have collected from customers by way of penalty for not maintaining minimum balance in their accounts over the last four years.
SBI alone collected over Rs2,400 crore during 2017-18, although the bank claimed that its charges for non-maintenance of AMB is among the lowest in the industry. SBI said it has also steeply reduced charges for non-maintenance of AMB up to 70 per cent in metros / urban and semi-urban categories. Charges in rural market were also reduced up to 75 per cent.
SBI has around 425 million SB accounts, of which nearly 40 per cent are under the exempted category. Customers also have the option to convert their existing SB accounts to BSBD accounts, free of cost.
SB accounts, such as PMJDY/BSBD, and of pensioners/ minors/ social security benefit holders are exempted from the AMB requirement, and that charges would not be recovered from these accounts
It also reiterated that effective April 2018, the AMB requirement has been reduced up to 40 per cent, keeping in view the feedback from various stakeholders.
It charges between Rs5-15 (plus GST) for various levels of shortfall in different areas. Its customers are required to maintain an average monthly balance of Rs3,000 for SB accounts in metros and urban areas, Rs2,000 in semi-urban and Rs1,000 in rural areas.
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