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SBI slashes monthly balance charges by 75 per cent

13 March 2018

The charges for non-maintenance of AMB for clients in Metro and Urban centers have been diminished from a greatest of Rs 50 every month to Rs 15 every month.

In semi-urban and rural centres the charges have been trimmed from Rs 40 per month plus GST to Rs 12 and Rs 10 per month plus GST, respectively. GST charges will be applicable same over and above the rates specified above.

As The Wire has reported, during April-November 2017, SBI collected Rs 1,771 crore in penal charges from its customers, which was more than its net profit of Rs 1,581.55 crore for the same period. These accounts are already exempted from charges on non- maintenance of minimum balance. But it later revised it downwards in October based on feedback from stakeholders. ‎The bank had faced a lot of flak after it came to light that it earned more from minimum balance penalties than its profits (which were contained because of bad loan provisions). If you maintain a minimum balance of less than 50% in metro cities, at present you have to give 30 rupees plus GST of 5.4 rupees.

Gupta said, "Bank also offers its customers to shift from regular savings bank account to BSBD account on which no charges are levied". Besides, students aged below 21 years are also not required to maintain minimum balance.

The bank has strong deposit franchise having 41 crore savings accounts and the above revision will benefit around 25 crore customers, he said.

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On reduction of charges, P K Gupta, MD - Retail & Digital Banking, SBI said, "We have reduced these charges taking into account the feedbacks and sentiments of our customers".

The move will eat into the fee income of the bank, which had reported the first quarterly loss in 20 years, as it had to make huge provisions for bad loans. The combined non-performing assets (NPAs) of 21 listed PSBs had risen to more than Rs 7 lakh crore at the end of September past year. My outgo on the ATM card itself is Rs 1,500 crore annually.

According to the release, the reduced rates will benefit 25 crore customers.

While levying of charges by public sector banks, for not maintaining minimum balances, has been in the news; it is still very low in comparison to that imposed by private sector banks.

SBI slashes monthly balance charges by 75 per cent