Defending its decision to levy a charge for failing to maintain average balance, State Bank of India said that it move is aimed to partly cover costs incurred on managing accounts.
Addressing an interactive session the group chairman Arundhati Bhattacharya said that the Bank has to bear the burden (costs of operation and systems) 110 million financial inclusion or JanDhan accounts.
“To manage such a large number of JanDhan accounts, bank needs some charges,” SBI chief said.
She also said that the move was not driven by the motive to stem the outflow of money from savings deposits after restriction on withdrawal is lifted.
“We ( SBI ) has the lowest minimum balance requirement. All other banks have the requirement. We were the only one to withdraw it in 2012″, SBI Chairman Arundhati Bhattacharya said at an interactive session.
SBI- the country’s largest bank will not slap penalty (for non-maintenance of minimum balance) for accounts opened under Prime Minister’s Jandahn Yojana.
Reacting on a plea from the government to reconsider its decision on fine, SBI managing director Rajnish Kumar said “there is no formal communication. We will see if something comes”.
Last week, the country’s largest lender decided to re- introduce penalty on non-maintenance of minimum balance in accounts and also revised charges on other banking services.
The new charges would be applicable from April 1. The move by the state-run banking major has faced a lot of criticism, including from the opposition parties.
From the beginning of the next financial year (April 1), failing to maintain a monthly average balance (MAB) in your State Bank of India (SBI) savings accounts will attract a charge. SBI had suspended this charge in July 2012 to expand its customer base and generate low-cost deposits, as those in savings account earn an interest rate of only 4 per cent.
The charge will be calculated based on the gap between the MAB and the actual balance in the accounts. MAB for those with accounts at branches in metropolitan areas would be Rs 5,000. If the difference between the MAB and the actual amount in the account is 50 per cent or Rs 2,500, SBI will slap a charge of Rs 50.
If the difference is between 50 and 75 per cent, SBI will charge Rs 75, and till 100 per cent, it will charge Rs 100. For rural areas, MAB is lower – Rs 1,000. The penalty for not maintaining MAB is also much lower in rural areas.