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SBI to Impose Penalty on Non-Maintenance of Monthly Average Balance in Accounts from April 1

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The country’s largest lender State Bank of India (SBI) has decided to reintroduce penalty on non-maintenance of minimum balance in accounts to be effective from April 1, 2017.

  • In case of failing to maintain Monthly Average Balance (MAB) in saving accounts, penalty of up to Rs. 100 plus service tax would be levied.
  • SBI had suspended levying charges on breach of minimum balance requirements in 2012 to acquire new customers. The move was also aimed to help the bank to generate low-cost deposits as the savings bank account earned just 4 percent interest.
  • The penalty amount will be used by the bank to cover expenses such as running operations and systems for its 250 million savings accounts.

Monthly Average Balance in Different Areas 

Area Monthly Average Balance Penalty
Metropolitan Area Rs. 5000 Rs. 50+service tax= Shortfall <=50% of MAB.
Rs. 75+service tax= Shortfall >50-75 %.
Rs. 100+service tax= Shortfall > 75%
Urban Area Rs. 3000 Rs. 40+service tax= Shortfall <=50% of MAB.
Rs. 60+service tax= Shortfall >50-75 %.
Rs. 80+service tax= Shortfall > 75%
Semi-Urban Area Rs. 2000 Rs. 25+service tax= Shortfall <=50% of MAB.
Rs. 50+service tax= Shortfall >50-75 %.
Rs. 75+service tax= Shortfall > 75%
Rural Area Rs. 1000 Rs. 20+service tax= Shortfall <=50% of MAB.
Rs. 30+service tax= Shortfall >50-75 %.
Rs. 50+service tax= Shortfall > 75%

Note: The charge has been calculated based on the difference between the required MAB and the actual balance in the accounts.

Other Transaction Charges

Cash Deposit

  • Savings Banks Account holders can deposit cash 3 times a month free of charge. Beyond that, Rs. 50+ST would be levied on every transaction beyond that.
  • In case of current account, the levy could go as high as Rs. 20,000.

Cash Withdrawal

  • If the number of cash withdrawal from other banks ATMs in a month is more than three times then a charge of Rs. 20 would be levied per transaction.
  • If the withdrawal is more than 5 times from SBI ATMs in a month then Rs. 10 would be levied per transaction.
  • SBI will not levy any charge on withdrawals from its own ATMs if the balance exceeds Rs.25,000.
  • In case of other banks’ ATM, no charge would be levied by SBI if the balance exceeds Rs. 1 lakh.
  • Rs. 15 would be charged for SMS alerts per quarter from debit card holders who maintain an average quarterly balance of up to Rs. 25,000 during the three-month period.
  • There will be no charge for UPI/ USSD transactions of up to Rs. 1,000.
  • SBI will charge even for issuing cheque books, cheque collection, stop payments, issuing certificates, bill collection and NEFT and RTGS transactions.
  • Besides, a annual maintenance fee of Rs 125-300 would be levied for debit cards depending on the card’s category.

Term Deposit

Among other things, SBI has reduced the interest rates on term deposits maturing between 180 days and 1year and between 456 days and 3 years with effect from March 1.

  • SBI will now pay an interest of 6.5% on deposits with maturities between 180 days and less than one year and 6.75% on maturities between 456 days and less than three years.
  • Earlier, SBI used to pay 6.75% on deposits maturing between 180 days and 210 days, 7% on those maturing between 211 days and less than a year, 6.95% on deposits maturing between 456 days and under two years, and 6.85% on those maturing between two years and less than three years.

State Bank of India (SBI)

State Bank of India (SBI) is an Indian government-owned multinational, public sector banking and financial services company.

  • The bank has more than 14,000 branches, including 191 foreign offices spread across 36 countries, making it the largest banking and financial services company in India by assets of Rs. 30.72 trillion as of 2016-17.
  • The company is ranked 232nd on the Fortune Global 500 list of the world’s biggest corporations as of 2016.

Keys:

  • ChairpersonArundhati Bhattacharya
  • HeadquartersMumbai
  • Founded: July 1, 1955