SBI says maintain Rs 5,000 balance or pay penalty

Mumbai: State Bank of India, country’s largest public sector lender, will start levying penalty for non-maintenance of minimum balance in savings account. According to NDTV, the bank has indicated it will increase the minimum balance required to run a savings bank account by manifold.

The decision was taken keeping in view huge expenditure that the the bank incurred in handling a large number of dormant or 'no-frills' accounts. Banks are already faced with financial troubles due to huge stockpile of bad assets worth $5.3 billion.

The bank has around 39 crore customers that includes depositors, pensioners and students. SBI has evaluated the penalty based on the city in which the bank lies.

For savings account at a branch in a metro city, SBI has fixed a monthly average balance of Rs 5,000 as minimum required balance. A penalty of Rs 50 and Rs 100 will be levied for violation of the rule.

SBI customers that come under the purview of urban and semi-urban branches, the penalty for not keeping required balance has been decided at Rs 3,000 and Rs 2,000 respectively, NDTV report said.

The bank has also revised cash withdrawals charges at its automated teller machine booths. There will be a fee of Rs 20 if the number of transactions in a months exceeds three allowed withdrawals. Apart from that, the bank will also charge Rs 10 for more than five withdrawals at State Bank of India ATMs.

Earlier, the bank had defended its move to charge penalty for non-maintenance of minimum balance saying it has large number of Jan Dhan Accounts and the bank needs charges to keep these accounts active.

SBI chairperson Arundhati Bhattacharya had said that the bank has 11 crore financial inclusion or Jan Dhan accounts and the decision was taken after taking into consideration a number of factors.