De-jargoned: The penalty for not maintaining average monthly balance

De-jargoned: The penalty for not maintaining average monthly balance

The State Bank of India (SBI) announced a substantial reduction of charges for non-maintenance of Average Monthly Balance (AMB) in savings accounts, effective April 1. The revised charges will be viable from April 01, 2018 and will profit more than 25 crore clients.

In metropolitan areas, a shortfall of 50% or less in the average balance for a month will be penalised Rs 10 instead of Rs 30.

Now after applying the new rule from 1 April for SBI customers in metro and urban areas, there will be a penalty of Rs 15 penalty and at the same time, for the semi-urban and rural areas, the penalty has been reduced from Rs 40 per GST to Rs 12 and Rs 10 plus GST.

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For customers in metro and urban areas, applicable charges for not maintaining Rs3,000, which is the AMB, have been brought down to Rs10-15 from Rs30-50 now. "Bank also offers its customers to shift from regular savings bank account to BSBD (Basic Savings Bank Deposit) account on which no charges are levied", said PK Gupta, MD, Retail & Digital Banking, SBI.

"When an SBI customer uses a debit card at some other bank ATM, then SBI has to pay Rs 17 to the bank". Prior, metro and urban clients were charged Rs 40 to Rs 100 rupees for not keeping up the minimum balance. Truly, This decision follows severe criticism that the bank received a huge income of Rs 1,771 crore in just eight months from clients who failed to maintain balance in their bank accounts. ‎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). The charges at semi-urban and provincial centers were also updated to Rs 20-40 from Rs 25-75.

Of the 41 crore savings accounts with SBI, 16 crore accounts under PMJDY / BSBD and of pensioner/minors/social security benefit holders were already exempted from the feature. In addition, students upto the age of 21 years are also exempted, it said in the release. Besides, it has unveiled a Rs 2.11 lakh crore recapitalisation plan.

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