into fee income of lender, AMB limit retained
Mumbai : State Bank of India on Tuesday reduced the penalty charges on non-maintenance of average monthly balance (AMB) by up to 75 per cent from April 1 as the measure had faced a public backlash for raking in huge profits by way of penal charges.
However, the bank has not lowered the monthly minimum balance requirement which has been retained at Rs 3,000 for metro customers, at Rs 2,000 for semi-urban accounts and at Rs 1,000 for rural accounts.
The move will eat into the fee income of the bank, which had reported first quarterly loss in 20 years, as it had to make huge provisions for bad loans.
“We’ve reduced these charges taking into account the feedback and sentiment of our customers. We have always focused on keeping the interests of our customers first and this is one of our many efforts towards fulfilling customer expectations,” SBI MD for retail and digital banking P K Gupta said.
Last April, SBI had re-introduced the penal charges on non-maintenance of average monthly balance, after a gap of five years. Later in October, the bank had revised down the charges to some extent. Between April and November 2017, the bank netted a windfall of Rs 1,771.67 crore, more than its second quarter profit, from customers for non-maintenance of minimum balance, the finance ministry data showed.
The bank on Tuesday reduced the 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 bank has strong deposit franchise having 41 crore savings accounts and the above revision will benefit around 25 crore customers, he said.
The bank offers its customers the option to shift from regular savings accounts to basic savings bank deposit (BSBD) accounts on which no charges are levied, he added. SBI has closed as many as 41.16 lakh savings accounts between April-January in the current fiscal year for not maintaining the average monthly balance, reveals an RTI query.
Of the 41 crore savings accounts, 16 crore are under the Pradhan Mantri Jan Dhan Yojana (PMJDY) /BSBD and of pensioner, minors, social security benefit holders which are all exempted from the penalty for not maintaining of the minimum balance. The country’s largest lender’s penalty on customers for non-maintaining minimum balance is much less than its private sector peers, though.
For instance, ICICI Bank and HDFC Bank have a minimum monthly average balance requirement of Rs 10,000 for a regular savings accounts in the metros and urban locations. While ICICI charges Rs 100 plus 5 per cent of the shortfall in required MAB, HDFC Bank charges up to Rs 600 for not maintaining the balance. SBI’s penalty on non-maintenance of AMB has been defended and justified by chairman Rajnish Kumar and Arundhati Bhattacharya.
CBI files FIR on $1.4mn forex card fraud at SBI branch
Mumbai : The Central Bureau of Investigation has registered an First Information Report on a complaint by the State Bank of India alleging $1.41 million fraud at a branch in Navi Mumbai through misuse of its pre-paid data card. According to the FIR, Sandeep Kumar Raghu Poojary, an employee with the company that provides manpower resources for pre-paid cards operation of the bank, kept using a $200 card by deleting the outstanding amount from the database. The card, along with a two add-on cards, were issued in Nov-Dec 2016 and were used for 374 transactions over the next three months. Yalamanchili Software Exports, where the accused worked, informed the bank of the incident on Feb 28, 2017.