SBI shuts 4.11 mn savings accounts for not keeping average monthly balance

SBI has reduced the penal charges for non- maintenance of AMB in the metros and urban centres from a maximum of Rs 50 per month

State Bank of India has closed as many as 4.11 million savings accounts between April-January in the current financial year for not maintaining the average monthly balance, reveals an RTI query.

Last April, the nation's largest lender had re-introduced the penal charges on non-maintenance of average monthly balance after a gap of five years. Later in October, it had revised down the charges to some extent.

"Due to provisions of penalty on non-maintenance of minimum balance, the bank has closed 4.11 million savings bank accounts between April 1, 2017 and January 31, 2018," the bank replied to an RTI query filed by Chandra Shekhar Gaud from Neemuch in Madhya Pradesh.

Even though the reply was furnished by the state-run lender on February 28, 2018, the bank today steeply reduced the penal charges on not maintaining the minimum balance.

The reply was to a specific query on the number of accounts being closed after introduction of charges on non- maintenance of minimum balance from April 1, 2017.

The State Bank has 410 million savings bank accounts. Of that, 160 million are under the Pradhan Mantri Jan Dhan Yojana/basic savings bank deposit (BSBD) and of pensioner, minors, social security benefit holders which are all exempted from the penalty for not maintaining of the minimum balance.

Between April and November 2017, the bank had netted a windfall of Rs 17.7 billion, more than its second quarter profit, from customers for non-maintenance of minimum balance, according to the finance ministry data.

Today, the lender reduced its charges for non- maintenance of average monthly balance by up to 75 per cent.

The bank has reduced the penal charges for non- maintenance of AMB in the metros and urban centres from a maximum of Rs 50 per month plus taxes at 18 per cent to Rs 15 a month and taxes. For urban and metro customers average monthly balance is of Rs 3,000 per month.

For semi-urban and rural centres, the charges have been reduced from Rs 40 to Rs 12, and Rs 10 per, respectively. The MBA requirement for semi-urban area is Rs 2,000, while for rural centres is Rs 1,000.

The bank offers its customers the option to shift from regular savings accounts to BSBD accounts on which no charges are levied, he added.