India's largest lender had started charging depositors the penalty on April 1, 2017.
The SBI Bank has issued a notification on April 1, reducing the penalty on a savings account. State Bank of India has given a relief to its over 25 crore savings account holders by reducing the charges for AMB by 75 percent. The revised charges for non-maintenance of minimum balance in metro and urban centres have been reduced to Rs 15 per month plus GST from a maximum of Rs 50 per month plus GST.
Going ahead, customers in semi-urban and rural centres have seen reduction in charges from Rs 40 per month plus GST to Rs 12 per month and Rs 10 per month plus GST respectively. "We have reduced these charges taking into account the feedback and sentiments of our customers", SBI's managing director (retail and digital banking) P.K. Gupta said.
The minimum balance for SBI savings accounts is Rs 3,000 for accounts in urban and metro areas. In the municipal corporation a fine of Rs. 50 GST tax is Rs. Rs 65 will be charged and in the municipal area Rs. 52 will be charged.
The move will benefit 25 crore customers of the bank. The bank rejects Jan Dhan accounts, essential funds bank stores (BSBD) accounts, retired people, recipients of social advantages from the legislature and records of minors from the MAB necessity.
SBI's penalty on non-maintenance of AMB has been defended and justified by chairman Rajnish Kumar and his predecessor Arundhati Bhattacharya. For instance, HDFC Bank Ltd has an AMB requirement of Rs10,000 for regular savings accounts in metro and urban centres, and Rs5,000 in semi-urban branches. My outgo on the ATM card itself is Rs 1,500 crore annually. The amount was more than SBI's July-September quarter net profit of Rs 1,581.55 crore and almost half of the Rs 3,586 crore it earned as net profit April-September. "Somewhere the bank also needs to recover its cost", he had said. Currently, the charges are in the range of Rs20-40. "But it can't work this way that everything comes free", Kumar said.