The country’s largest lender State Bank of India collected Rs 1,771 crore during April-November 2017 as charges from customers who did not maintain their minimum monthly average balance (MAB) in their accounts, according to Finance Ministry data.
This is more than the bank’s July-September quarter net profit of Rs 1,581.55 crore and nearly half of the Rs 3,586 crore it earned as net profit April-September.
SBI did not collect any money from levy of charges for non-maintenance of MAB during the 2016-17 financial year. The charges were re-introduced after a gap of five years during the current fiscal.
The bank has a total of 42 crore savings bank accounts of which 13 crore are Basic Savings Bank Deposits Accounts and Pradhan Mantri Jan Dhan Yojana accounts, both categories exempted from levy of such charges.
SBI did not reply to an email seeking comments for the report.
After SBI, Punjab National Bank recorded the highest collection of Rs 97.34 crore through levy of such charges during the April-November period followed by Central Bank of India’s mop-up of Rs 68.67 crore and Canara Bank’s Rs 62.16 crore.
Punjab and Sind Bank is the only state-owned lender which did not collect any charges during April-November and in 2016-17.
Most banks — including private banks — levy charges for non-maintenance of MAB. In order to discourage cash transactions, private banks including HDFC Bank, ICICI Bank and Axis Bank also charge a specific transaction amount after a certain limit in the case of cash transactions. The data on collections by private banks through levy of charges on non-maintenance of MAB was not immediately available.
SBI revised service charges on various transactions, including cash deposits and for failing to maintain monthly average balance in savings bank accounts with effect from April 1, 2017. These charges were slightly relaxed in September when SBI reduced the MAB requirement for customers in metro cities to Rs 3000 from Rs 5000. The bank also exempted pensioners, beneficiaries of social benefits from the government and accounts of minors from levy of these charges with effect from October 1. This exemption was in addition to Basic Savings Bank Deposits Accounts (BSBD) customers.
Between April and September, the SBI imposed service charge for failure in MAB in metro, urban and rural centres.
For metro centres, the failure to meet the Rs 5000-balance attracted Rs 50 charge for 50 per cent shortfall, Rs 75 for shortfall between 50-75 per cent and Rs 100 for 75 per cent or more shortfall.
In the case of urban centres, failure to meet Rs 3000 MAB will attract Rs 40 service charge, Rs 60 for 50-75 per cent shortfall and Rs 80 for 75 per cent or more shortfall.
Apart from charges related to non maintenance of MAB, SBI had an annual maintenance fee of Rs 125-300 for debit cards depending on the category of the card.
On September 25, the SBI announced a downward revision in charges for non-maintenance of MAB ranging from 20% to 50% across all population groups and categories.