Not just SBI: PNB, BoB, BoI also charge for defaulting on minimum balance

PNB, BoB, BoI, Canara Bank already charge customers for failing to maintain a minimum balance

State Bank of India is mulling charging a levy from April 1 from customers who fail to maintain a minimum monthly balance in their savings accounts — its peers are already doing it.

Punjab National Bank (PNB), Bank of Baroda (BoB), Bank of India (BoI) and Canara Bank already charge their customers a levy for failing to maintain a minimum balance for a quarter or a month.

Rural customers of Delhi-based PNB need to maintain a quarterly average balance (QAB) of at least Rs 500. For those in semi-urban, urban and metropolitan areas, the QAB is Rs 1,000. Charges for not maintaining the minimum QAB varies between Rs 15 and Rs 20, depending on the location and deficit in the accounts, according to the bank’s website. BoB and BoI, both Mumbai-based large lenders, also follow the practice of QAB. 

The former expects rural and semi-urban savings bank account holders to have Rs 500 as QAB. 

The charge for failing to maintain it is up to Rs 100. For urban and metropolitan customers, the QAB is Rs 1,000, with penalty up to Rs 200.

BoI expect customers in all centers to keep a QAB of Rs 500. The penalty is about Rs 40 per quarter, plus service tax for accounts without cheque book facility and Rs 54 plus service tax for account that issue cheque books.

Canara Bank looks at the MAB. While it has prescribed MAB of Rs 500 for rural areas, the amount is double (Rs 1,000) for semi-urban, urban and metropolitan centres. The fine varies between Rs 20 and Rs 40, plus service charge.   

SBI had suspended the charge for not maintaining MAB in July 2012 to expand its customer base and generate low-cost deposits, as those in savings account earn interest rate of only 4 per cent. 

The bank said it is resuming the charge to partly cover costs for maintaining systems and operations of savings accounts. 

The charge will be calculated based on the gap between the MAB and the actual balance in the accounts.