India's largest lender had started charging depositors the penalty on April 1, 2017.
The State Bank of India has reduced charges for non-maintenance of Average Monthly Balance (AVB) from Rs 50 to Rs 15.
Between April 2017 and November 2017, SBI had collected Rs1,771.67 crore from customers on account of non-maintenance of AMB, according to a response that the Ministry of Finance gave in Lok Sabha in February 2018 (read it here).
In semi-urban and rural centres the charges have been trimmed from Rs 40 per month plus GST to Rs 12 and Rs 10 per month plus GST, respectively.
"We have reduced these charges taking into account the feedbacks and sentiments of our customers". In metro cities, the minimum balance you need to maintain is Rs3,000; it is Rs2,000 in semi-urban branches; and Rs1,000 in rural branches.
The bank excludes Jan Dhan accounts, basic savings bank deposits (BSBD) accounts, pensioners, beneficiaries of social benefits from the government and accounts of minors from the MAB requirement. The charges for non-support of AMB for clients in Metro and Urban focuses have been lessened from a most extreme of Rs 50 every month to Rs 15 every month. The move had invited widespread criticism.More news: The UCLA basketball team is going dancing — Selection Sunday
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The revised charges would be effective from April 1, 2018.
Public sector banks (PSBs) are reeling under bad loans.
Of the 41 crore savings accounts with SBI, 16 crore accounts under PMJDY / BSBD and of pensioner/minors/social security benefit holders were already exempted from the feature.
Interestingly, while SBI provided relief to customers in regards to AMB in savings account, it also encouraged customers for shifting towards Bank Saving Bank Deposit (BSBD) account. While ICICI charges Rs 100 plus 5 percent of the shortfall in required MAB, HDFC Bank charges up to Rs 600 for not maintaining the balance. The decision will benefit over 25 crore customers.
There are huge transactions costs associated with savings bank accounts, he had said. Besides, it has unveiled a Rs 2.11 lakh crore recapitalisation plan. "Somewhere the bank also needs to recover its cost", he had said.
"We all, including myself, want a first class service, but want everything free.I also like it".