On 11 March 2020, State Bank of India (SBI) stated in its press release that the requirement of holding an Average Monthly Balance (AMB) for savings accounts is waived off. Effective immediately, all SBI customers will enjoy the zero balance facility on their savings bank accounts.
According to the press release, about 44.51 crore savings account holders will benefit from this move. Further, the charges on maintaining AMB are also waived off on these accounts.
Until now, SBI savings account holders had to maintain an AMB of Rs.3,000 in metro cities, Rs.2,000 in semi-urban cities, and Rs.1,000 in rural areas. Also, the bank would levy a penalty of Rs.5 to Rs.15 + taxes on non-maintenance of AMB.
Furthermore, the bank has waived off SMS charges that would be levied every quarter. The bank has also reduced the interest rate on savings accounts to flat 3% p.a. for all savings account holders. Until now, the bank would offer 3.25% p.a. for deposits less than Rs.1 lakh. On the other hand, it would offer 3% p.a. for deposits above Rs.1 lakh.
Tracking back at the bank’s decisions, SBI had waived off the minimum balance charges in the past for five years. It, then, reintroduced the fees in April 2017. A penalty was levied on account holders who did not have enough money to maintain the minimum balance in their accounts.
With effect from 10 March 2020, the Public Sector Undertakings (PSU) banks have revised the MCLR and interest rates on fixed deposit accounts as well.
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