During the Corona virus lock down, various Indian Banks had announced an exemption from maintaining an average monthly balance limit in one’s savings account. The State Bank of India made an official statement on March 11, 2020, that they have taken back the policy for the requirement of keeping a monthly balance for savings accounts. “State Bank of India has decided to waive maintenance of Average Monthly Balance for all Savings Bank Accounts,” as per the bank’s official press release. That id SBI customers keeping zero funds in any type of savings account with the bank will not have to bear any penalty charges. Before this update, SBI’s Average Monthly Balance (AMB) rules defined a particular amount of minimum balance that customers needed to maintain in their savings accounts, which could lead to penalty charges in case of non- compliance.
This update would be a huge relief for the customers as they can now maintain zero balance in their savings bank accounts. This initiative was taken by the Bank to boost Financial Inclusion in the country. Approximately this would benefit 44.51crore savings bank accountholders. The charges on maintaining AMB are now off on all SBI savings bank accounts. Previously, SBI savings bank account customers had to maintain an average monthly balance of Rs 3,000(Metro), Rs 2,000(Semi- Urban), and Rs 1,000(Rural). The bank also used to impose a penalty of Rs 5 – Rs 15 plus taxes; if the above mentioned average monthly balance is not maintained.
The Bank has taken off another burden on customers regarding the SMS charges imposed quarterly basis. The interest rate on savings bank accounts has been rationalized to 3 percent per annum for all savings bank account holders. Earlier, savings bank accounts with a balance of less than Rs 1lakh earn 3.25 percent a year, whereas those with more than Rs 1lakh earn 3 percent.
SBI currently pays an interest rate of 2.7% on savings bank account deposits. It is the largest commercial bank in terms of branches, customers, employees, deposits, and assets. SBI also claims that they are the largest mortgage lender presently in the country. As on March 31, 2020, SBI has a base deposit of over Rs 32lakhcrore approximately. The bank also has the largest network of over 22,000 branches in India. They have over 58,000 ATM / CDM network along with 61,000 of total BC outlets.
