RBI should step in

Not maintaining MAB will invite penalty ranging from Rs 20 (rural branches) to Rs 100 (metro cities)

SBI has prescribed the monthly average balance (MAB) requirement of Rs 5,000 for branches in six metros, Rs 3,000 for urban, Rs 2,000 for semi-urban and Rs 1,000 for rural branches in savings bank (SB) accounts (excluding Jan-Dhan Yojana, Surabhi accounts) from April 1.

Not maintaining MAB will invite penalty ranging from Rs 20 (rural branches) to Rs 100 in (metro cities). These changes and penalty will apply to SB account holders of recently merged associate banks of SBI. Other public sector banks are likely to follow suit.

SBI Chairperson Arundhati Bhattacharya said the hike in MAB was necessitated to offset the cost of maintaining Jan-Dhan accounts. A few private sector banks such as ICICI, IndusInd have prescribed MAB of Rs 2,500 to Rs 10,000 or more for SB accounts depending on the location of the branches. Hence, many customers preferred to hold accounts in public sector banks, cooperative banks etc. A large number of customers, who generally have balance of about Rs 1,000 at the end of every month will suffer.

It is sad that over the last two decades the Reserve Bank of India (RBI) has been concerned more with deregulation than control over banks. The RBI should not allow banks, including SBI, to decide unilaterally and against the interest of customers. The central regulator should exercise its authority and direct SBI to reverse its decision.

Ramanath Nakhate Mumbai
Letters can be mailed, faxed or e-mailed to: 

The Editor, Business Standard

Nehru House, 4 Bahadur Shah Zafar Marg 

New Delhi 110 002 

Fax: (011) 23720201  ·  E-mail: letters@bsmail.in

All letters must have a postal address and telephone number