‘Reconsider penalty for not keeping minimum balance’

Government tells SBI after the country’s largest lender announced imposing penalty ranging from `20-100 on non-maintenance of Minimum Average Balance in savings bank accounts from April 1

New Delhi : The government on Monday asked SBI to reconsider its decision to levy penalty on non-maintenance of minimum balance, which the bank plans to hike manifold from April 1 impacting over 31 crore savings bank account holders.

 State Bank of India, according to a source, has also been asked to reconsider charges it proposes to levy on cash transactions and ATM withdrawals over specified limits.

 The country’s largest lender has announced imposing penalty ranging from Rs 20-100 on non-maintenance of Minimum Average Balance (MAB) in savings bank accounts from April 1.The penalty is as high as Rs 500 in case of current accounts.The penalty for breach of MAB is being reintroduced after a gap of five years.

The bank has also increased the minimum balance requirement by many times, which is as high as Rs 5,000 for account maintained with branches in six metro cities.

SBI has also imposed restrictions on withdrawals of cash from its branches as well as ATMs. These will attract charges after certain specified limits.”Government has asked SBI to reconsider it’s decision to impose a penalty on non- maintenance of minimum balance in accounts from April 1 onwards,” the source said.

The government has also urged SBI and other lenders, including private sector banks to “reconsider the charges oncash transactions and ATM withdrawals above a certain limit”.

  Some private banks, like HDFC Bank, ICICI Bank and AxisBank, have started charging a minimum amount of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.In case of rural branches, the minimum balance has been fixed at Rs 1,000. Breach of MAB will attract a penalty ranging between Rs 20 and Rs 50.

  Five associates banks of SBI — State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH) — will merge with the parent on April 1.

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