State Bank of India (SBI) will begin imposing a penalty on its account holders from Saturday for not maintaining a minimum balance. In metropolitan areas, the mandatory minimum balance was set at Rs 5,000, while it is Rs 3,000 in urban areas, Rs 2,000 in semi-urban areas and Rs 1,000 in rural areas. Further, the bank will also levy a fine of Rs 50 if customers make more than three cash transactions at its branch per month. The penalties will affect around 31 crore depositors, including pensioners and students, according to NDTV.
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According to a notice posted on the bank’s website on March 3, the charges will be levied based on the difference between the required balance and the shortfall. The bank will charge a base fee of Rs 75 if the shortfall is between 50-75 per cent, and Rs 50 is the shortfall is below 50 per cent. In rural areas, the fine will be anywhere between Rs 20-50 excluding service tax.
SBI chairman Arundhati Bhattacharya had previously justified the move saying the bank needs to balance the “burden” of managing a large number of no-frills Jan Dhan accounts. She had said, “SBI’s requirement for minimum balance is lowest among all banks. SBI was the only bank that didn’t have this as we have removed it in 2012. We have 11 crore financial inclusion accounts and have to manage them as well.” The penalty will not be imposed on Jan Dhan accounts.
Regarding ATM charges, she added, “We are charging as people go to ATMs, withdraw cash and give it to somebody who in turn deposits it into the bank. This type of transaction involves a cost which is not known to public as bankers do not levy any charge on the customers.”
Separately, starting April 1, the country’s largest lender will begin operating with five of its subsidiaries including State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore, and the Bharatiya Mahila Bank. The six-way merger boosts SBI into the league of top 50 banks across the world, with regard to assets, reported news agency PTI. The merger leaves the bank with a total customer base of at least 37 crore, a branch network of around 24,000 and nearly 59,000 ATMs in India.