Maintain Minimum Balance of ₹5000 at State Bank of India (SBI)

Latest Updates 470 views

From 1 April 2017, SBI has decided to increase the minimum balance limit for savings account to ₹5000 which was earlier ₹500 (for students account) and ₹1000 (for others having a cheque book). The bank has also announced that there will be a penalty for non-maintenance of minimum balance between ₹50 and ₹100.

Revision in minimum amount balance for SBI account holders

State Bank of India is expected to hit around 31 crore depositors including the pensioners and students after this move. The minimum amount balance for the urban and semi-urban branches has also been revised and decided at ₹3000 and ₹2000 respectively. The cracking the new decision would attract a penalty ranging between ₹20 and ₹50. This might be surprising SBI account holders as until now there was no penalty on non-maintenance of minimum balance in accounts.

Post the revised charges, the cash withdrawal from ATMs will also attract a charge of up to ₹20 if the number of transactions is more than 3 times from other bank’s ATMs in a month and ₹10 for more than five withdrawals from SBI ATMs. However, there will be no charges on withdrawals from the own ATMs of State Bank of India (SBI) within the maximum limit of ₹25,000. In addition to this, in the case of withdrawals by its customers from ATMs of other banks and there will be no charge if the balance exceeds by ₹1 lakh.

SBI chairperson Arundhati Bhattacharya has justified its decision by saying that,

Today, we have lot of burden such as we have 11 crore financial inclusion or Jan Dhan accounts. To manage such a large number of Jan Dhan accounts, we need some charges. We have considered many factors and after analyzing carefully, we have taken this step

She has also said that these charges existed earlier as well, however, SBI was the only bank that decided to withdraw it in the year 2012. So, it is quite expected that the changes will not have much impact and will be accepted by the account holders.

Must Read  Equity Hot Favourites for MFs, Sees Inflow of ₹2,700 Cr in Aug

From today onwards, State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH) will also merge with State Bank of India (SBI). After this merger, SBI is expected to become a lender of global portions with an asset base of ₹37 lakh crores or over $555 billion. Thus, it can trigger a phase of consolidation in Indian banking space which by enlarge is a fragmented one consisting of various small, mid and large players vying for gaining the upper hand over each other.