SBI bids goodbye to minimum balance requirement in savings accounts, rationalizes interest rate

The State Bank of India (SBI) on Wednesday issued a statement saying that it is doing away with minimum balance requirements in savings accounts. The nationalized bank also rationalized the interest rate on savings bank accounts to a flat 3 per cent per annum.

Until now, customers with savings accounts in SBI in metro and urban areas were required to maintain a minimum account balance of Rs 3,000 as compared to 2,000 in semi-urban branches and Rs 1,000 in rural areas. The bank also charged penalties ranging from Rs 10 to Rs 15 plus GST from customers in metro and urban areas who failed to maintain a minimum account balance.

In comparison, customers in semi-urban branches were penalised with a fine of Rs 7.5 to Rs 12 plus GST for the same and customers in rural areas charged Rs 5-10 plus GST for non-compliance with the average monthly balance (AMB) factor.

With respect to interest rate on savings accounts, SBI has slashed the same from 3.5 per cent on accounts with balances upto Rs 1 lakh, to a flat 3 per cent. For savings accounts with balance above Rs 1 lakh, the interest rates remain standard 3 per cent at 2.75 per cent below RBI’s repo rate for balance above Rs 1 lakh.

Earlier this month, the SBI took up a lead role in RBI’s revival plan for Yes Bank which landed in trouble owing to its distressing loan book. SBI chairman Rajnish Kumar has been appointed the administrator for this move. Kumar told India Today that SBI will acquire 49 per cent stake in Yes Bank as part of strategic investment.

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