SBI or State Bank of India customers holding savings bank accounts with the country’s largest bank are required to maintain a certain minimum balance every month. SBI, which has specified different monthly average balances (MAB) for accounts held in different types of branches, charges a penalty for non-compliance depending on the degree of shortfall. That means an SBI customer keeping an insufficient monthly average balance in a month is required to pay a penalty amount determined by how much he or she deviated from the prescribed minimum balance.
SBI has classified its branches into four types, for determining the amount of penalty for non-compliance with its minimum balance rules. These are: metro, rural, urban and semi-urban. For example, an SBI customer holding a savings bank account with a metro or urban branch of the bank is required to maintain a monthly average balance of Rs. 3,000, according to the bank’s website – sbi.co.in.
SBI’s minimum balance or MAB (monthly average balance) rules explained, according to its website:
Minimum balance required vs branch type
From October 1, 2017, SBI customers holding savings bank accounts with the bank’s metro and urban branches are required to maintain a monthly average balance of Rs. 3,000, according to the SBI website. Customers in semi-urban SBI branches are required to maintain a monthly average of Rs.2,000. Those holding SBI savings bank account in rural branches are required to keep a minimum monthly balance of Rs. 1,000.
Penalty amount for non-maintenance of minimum balance
Metro/urban branches: SBI customers holding a savings bank account with a metro or urban branch are charged a penalty of Rs. 30-50 plus GST for non-compliance with its monthly average balance or MAB rules. According to the SBI website, the savings bank account holders in a metro or urban branch finishing a month with a monthly average balance shortfall of up to 50 per cent (monthly average balance of Rs. 1,500-3,000) are charged a penalty of Rs. 30 plus GST. In the SBI metro and urban branches, savings bank accounts with a shortfall between 50 per cent and 75 per cent will attract a charge of Rs. 40 plus GST, according to SBI. Those with a shortfall of more than 75 per cent will attract a charge of Rs. 50 plus GST, according to the SBI website.
Semi-urban/rural branches: Those holding savings bank accounts at semi-urban and rural SBI branches are required to maintain a monthly average balance of Rs. 2,000 and Rs. 1,000 respectively. In these categories, SBI charges a penalty of Rs. 20 plus GST for a shortfall of up to 50 per cent as per monthly average balance rules, according to the bank’s website. Accounts with a 50-75 per cent shortfall attract a penalty of Rs. 30 while those with that of more than 75 per cent are e charged Rs. 40 plus GST.
SBI bank accounts with no minimum balance requirement
At the same time, SBI offers some types of accounts that are exempted from its MAB or monthly average balance requirements. Under a special type of bank account, called Basic Savings Bank Account, SBI doesn’t require the customer to maintain any specific monthly average balance.
SBI’s Basic Savings Bank Account is among the types of bank account free from the requirement of Monthly Average Balance or minimum balance. Other than the Basic Savings Bank Account, such account types include Financial Inclusion Accounts, No frill Accounts, Salary Package Accounts and Small Accounts, according to the SBI website.
State Bank of India (SBI) had said in January this year that it was looking at revising minimum balance amount and penalty charges of its accounts. The move came after SBI faced all-round flak for earning Rs. 1,771.67 crore, more than its second quarter profit, from customers for non-maintenance of monthly average balance in savings accounts in eight months of 2017-18.