State Bank of India Reviews Monthly Average Balance: 3 Things That Will Come in Effect from October 1

State Bank of India has recently reviewed its policy on Monthly Average Balance (MAB) and the charges on non-maintenance of MAB, which will come in effect from tomorrow i.e. October 1st 2017 onwards.

This revision is expected to impact 5-Crore SBI account holders. Here are 3 Things that will impact you if you are an SBI Account Holder:

1) Reduced Monthly Average Balance for Metros

State Bank of India has decided to keep Metro and Urban Centres in the same category for MAB. Currently, the SBI account holders in Metro cities are supposed to keep monthly average balance of ₹5000 while the same for Urban branches is ₹3000. Therefore, with this revision, now Metro account holders too need to maintain a monthly average balance of ₹3000 only. SBI account holders of Semi-Urban and Rural branches are mandated to maintain ₹2000 and ₹1000 respectively, that remains unchanged.

2) Reduced Penalty for Non-Adherence, GST Removed

SBI has also reduced the non-maintenance penalty for Monthly Average Balance between a range of 20%-50% across all categories and population groups. Which means that from tomorrow onwards, the MAB non-adherence charges at Urban and Metro Centres will range from ₹30-₹50 and the same for Semi-Urban and Rural centre SBI branches would be from ₹20-₹40.

Apart from slashing the penalty for Non-Adherence of MAB, the bank has also removed GST charges on the revised penalty. For example: earlier in Metro Centres, account holders were supposed to pay ₹100 + GST penalty if the MAB fell below 75% of ₹5,000 and ₹50 + GST penalty if it was short by 50% of MAB.

However, from October 1st 2017, the new penalty charges for Non-Adherence of MAB not only attract reduced charges but there would be no GST charged on the same.

3) Exemption from MAB

In a much-awaited move, State Bank of India has exempted a few categories which need not maintain a minimum monthly average balance in their SBI accounts. These categories include:

i) Financial Inclusion Accounts

ii) No frill accounts

iii) Salary Package accounts

iv) Basic Savings Bank Deposit Accounts (BSBD)

v) Small Accounts

vi) Pehla Kadam and Pehli Udaan accounts

vii) Minors up to the age group of 18 (Primary Account Holder)

viii) Pensioners, all categories, including recipients of social welfare benefits

Apart from the above mentioned categories, SBI has also clarified that around 13 Crore SBI accounts that were opened under the Prime Minister’s Jan Dhan Yogna (PMJDY) and Basic Savings Bank Deposit Accounts (BSBD) are already exempted from MAB.

The bank further reiterated that the SBI account holders always have an option of converting their regular savings account to Basic Savings Bank Deposit Accounts (BSBD) if they cannot maintain MAB. This facility is free of charge and can be availed at any SBI bank branch across India.