The State Bank of India is planning to cut down its minimum balance requirement after a report that said the lender profited from fines. The minimum balance limit required currently in urban centres is Rs 3,000. In June 2017 SBI had increased the minimum balance requirement to Rs 5,000. However, facing adverse reactions by the public it brought down the minimum balance requirement to Rs 3,000 in metros, Rs 2,000 in semi-urban whereas in rural centres the amount was brought to Rs 1,000.
Under government’s pressure for reintroducing monthly average balance (MAB), the country’s largest lender had earlier defended the charges and said the profit gained by banks were paltier on such accounts as compared to the services it offered free of cost. The charges were reintroduced after a gap of five years during the current fiscal.
SBI is also changing the requirement from monthly average balance to quarterly average balance. The move follows finance ministry reports which showed SBI collected Rs 1,771 crore during April-November 2017. This is more than the bank’s July-September quarter net profit of Rs 1,581.55 crore and nearly half of the Rs 3,586 crore it earned as net profit April-September.
According to sources, the bank is looking at bringing down the minimum balance requirement to around Rs 1,000 but is yet to take a call. While SBI’s Rs 3,000 minimum balance requirement is higher than what is charged by several public sector banks, it is the lowest among large private banks.