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 bank has reduced the charges by up to 75% in different categories of savings account, after taking in feedback from various stakeholders.
In October 2017, SBI had cut service charges for those people who do not maintain their monthly average balance; they reduced the charges by a huge 20-50%. The revised charges will be effective from April 01, 2018 and will benefit more than 25 crore customers.More news: United Kingdom economy to grow slightly more quickly, Hammond predicts
Now, The charges for non-maintenance of AMB customers in Metro cities (Mumbai, Delhi, Kolkata) and Urban centres have been reduced from 50Rs per month to 15Rs per month. If it had Rs5,000 for 10 days, Rs3,000 for 10 days, and Rs2,000 for 11 days; the average monthly balance would be: [(5,000x10)+(3,000x10)+(2,000x11)]/31 = Rs3,290.
SBI has also slashed charges for not-maintenance of Rs2,000 as ABM in bank accounts in semi-urban areas to Rs7.50-12 and Rs1,000 in accounts in rural area to Rs5-10.
SBI also offers its customers options to convert their regular savings bank account to basic savings bank deposit account (BSBD) on which no charges are levied.More news: Warren Buffett Offers Big Money for Bracket Challenge
Of the 41 crore savings accounts, 16 crores are under the Pradhan Mantri Jan Dhan Yojana (PMJDY)/BSBD and of the pensioner, minors, social security benefit holders which are all exempted from the penalty for not maintaining of the minimum balance.
SBI had re-implemented AMB penalties this fiscal year after a gap of six years. Both these accounts do not have minimum balance requirements. On the other hand, if we talk about rural areas, you have to maintain a balance of 1000 rupees in your account as a minimum balance.
The state-owned lender has around 410 million savings bank accounts, of which around 160 million are exempted from AMB requirement. The bank had subsequently lowered the AMB, following criticism from the customers.More news: Analyst EPS Estimates Coverage: Citizens Financial Group, Inc. (CFG)