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SBI may reduce minimum balance requirement: Report
Moneylife Digital Team 05 January 2018
Economy & Nation
State Bank of India (SBI), the country's largest lender, may reduce its requirement for minimum average balance on savings account says a media report.
 
Quoting unnamed sources, the Economic Times, in its report says, "the bank is looking at bringing down the minimum balance requirement to around Rs1,000 but is yet to take a call. While SBI's Rs3,000 minimum balance requirement is higher than what is charged by several public sector banks, it is the lowest among large private banks."
 
As reported earlier, the state-run lender had earned a whopping Rs1,771 crore as penalty income from customers for not maintaining minimum average balance during April to November 2017. This penalty income earned by SBI is more than its net profit of Rs1,581.55 crore earned during July to September 2017 quarter.
 
Last year in September and October, responding to strong protests by customers, expressed most vociferously in social media, SBI while reviewing MAB requirements and charges for non-maintenance of MAB, had also decided to waive charges for closing savings bank account that are in existence for over six months. For non-maintenance of MAB, SBI has revised downward its charges ranging from 20% to 50% across all population groups and categories. The charges at semi-urban and rural centres range from Rs20 to Rs40 and at urban and metro centres from Rs30 to Rs50. The revised MAB requirement and charges will become applicable from October 2017.
 
Even the employees of Reserve Bank of India (RBI) raised the issue of extortionate banking service charges by SBI. In September 2017 letter, Samir Ghosh, General Secretary of All India Reserve Bank Employees Association (AIRBEA), told RBI Governor Dr Urjit Patel, that "We are being constrained to draw your kind attention to certain recent business decisions of the country's largest bank SBI like withdraw cash only three times a month free of charge and fine failure to maintain balance." 
 
Highlighting the apathy of small depositors, the employees union says, for savings bank accounts held in metro branches, the required minimum average monthly balance is Rs5,000, and if the amount falls below Rs3,750, SBI levies a penalty of Rs100 plus service tax. The charges and minimum account balance vary across metro, urban, semi-urban and rural areas. According to reports, during the June 2017 quarter, SBI had earned Rs235 crore only from such fines, which goes directly to its net profit.
 
Moneylife Foundation has been at the forefront of speaking up for bank customers. Earlier, on 4th July, thousands of people joined the unique #TweetMorcha against arbitrary bank charges, with the hashtag #BankSeBachao trending at top spot in India and also featuring in worldwide trends that afternoon. People from across the globe sent tweets to @NarendraModi and @ArunJaitley with the hashtags of #BankSeBachao and #TweetMorcha. 
 
An online petition launched by us on Change.org has garnered more than two lakh signatures. (Sign the Petition). One of the key points of the petition is about unreasonable and unfair bank charges. "Frequent increase in charges and billing customers by stealth through opt-out clauses that are not noticeable must be stopped immediately. For e.g. HDFC Bank started levying charges for an invite-only program, which unethically assumes that the customer is already in and willing to pay for it. The levy is stopped only when the consumer notices it and calls the bank to protest; this too is not an easy process," the petition says.
 
With RBI’s own staff now raising issue of unfair charges levied by SBI, it is high time that the regulator wakes up to ground level reality and take necessary action against such practices. 
 
Earlier on 12 May 2017, a group, including well known NGOs, trade unions, finance editors and experts, presented a 1,100 page printout of over 100,000 signatures to an online petition at Change.org to M Veerappa Moily, Chairman of Parliamentary Standing Committee on Finance.
 
The Moneylife Foundation Campaign has certainly ruffled several feathers at the Reserve Bank as can be seen by some decisions taken by the regulator. This includes limiting customer liability, asking banks to share details of transactions in passbook or statements, expanding the role of the Banking Ombudsman. However, there is so much more that the Reserve Bank needs to do, like making its Consumer Charter more effective and effectively curtailing the practice of mis-selling and unfair service charges.
 
SBI have a network of about 24,000 branches (post merger of associate banks with SBI) and more than 40 crore customers of which 31 crore have savings bank accounts.  
 
Comments
VIMAL KUMAR
8 years ago
Govt. wanted digital India for transparency in financial dealings .encouraged every one to open accounts in bank. we poor soul complied. Banks took this as an opportunity to fill their coffers which was looted by the so called rich and influential and powerful people.
Now we are being levied with SMS charges,minimum balance charges,ATM charges,check book charges,withdrawal charge,deposit charges etc etc. Recently an old woman in kerala received Rs .3300 as pension from Govt . bank deducted Rs.3028 as charges for non keeping minimum balance. when the news came in paper,the bank issued a statement stating it as an error and returned the money. this is not an isolated case. there are so many illiterate who doesn't know where to complaint /how to complaint.
Reply
Gurudutt Mundkur
8 years ago
The Average Quarterly Balance in Central Bank of India is Rs 1,000/=.
It is nil for Senior Citizens.
Reply
PradipKumar Chakrabarty
8 years ago
Stop handing out CHEAP gimmicks like these! Restore the interest rates of Savings Bank account. you have given to poor savers untold miseries!
Reply
k.mohanarangam k.mohanarangam
8 years ago
charges for not maintaining
stipulated minimum balance
in savings bank accounts by
customers can be given a
second thought by sbi
considering the ability to pay
the charge by the account holder as majority of them are
salaried and low income group
Reply
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