It slashed service charges for non-maintenance of AMB by 20-50%.
In a move that is likely to benefit around 25 crore customers of the PSU bank, the State Bank of India (SBI) on Tuesday slashed charges for non-maintenance of Average Monthly Balance (AMB) in savings accounts by almost 75 per cent.
SBI collected Rs1,771.67 crore from customers on account of non-maintenance of AMB between April and November 2017, according to the finance ministry's answer in Lok Sabha on 29 December.
Along with this, the reduction in charges for not maintaining the minimum balance in the metro and urban centers category would also be reduced by 20-50%.
SBI has also slashed charges for not-maintenance of Rs2,000 as ABM in bank accounts in semi-urban areas to Rs7.50-12 and Rs1,000 in accounts in rural area to Rs5-10.
"We have reduced these charges taking into account the feedbacks and sentiments of our customers". Prior, metro and urban clients were charged Rs 40 to Rs 100 rupees for not keeping up the minimum balance. "Bank also offers its customers to shift from regular savings bank account to BSBD account on which no charges are levied". The revised charges will be effective from April 1. Truly, This decision follows severe criticism that the bank received a huge income of Rs 1,771 crore in just eight months from clients who failed to maintain balance in their bank accounts. "The bank has always focused on keeping the interests of its customers first and this is one of our many efforts towards fulfilling customers' expectations", he added.
SBI's penalty on non-maintenance of AMB has been defended and justified by chairman Rajnish Kumar and his predecessor Arundhati Bhattacharya.
AMB charges are levied by private banks too.
The state-owned lender has around 410 million savings bank accounts, of which around 160 million are exempted from AMB requirement. Currently, the charges are in the range of Rs20-40.
Nearly, 25 crore bank customers will be getting the benefit of this order. 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.