SBI waives closure charges for 1 year old savings accounts

Days after revising minimum balance requirement for savings account, the largest public sector lender, State Bank of India (SBI), has waived off closing charges for savings account holders. The closure fee waiver is applicable for accounts which are at least 1 year old.

Earlier, SBI was charging Rs 500 with Goods and Service Tax (GST) as closure charges for its savings account customers. Customers who close their accounts within 14 days after opening are exempted from any charges. The revised savings bank account closure charges are effective from October 1.

For customers, who close their accounts after 14 days and before completing 1 year after opening an account will be charged Rs 500 and extra GST, the bank had said in a notification.

Last week, SBI revised the minimum account balance for its savings accounts, as well as the penalties for non-maintenance of minimum balance. The major change has been made with respect to savings accounts in metro cities, where SBI account holders will now have to maintain a monthly average balance (MAB) of Rs 3,000, instead of Rs 5,000.

The average balance for SBI savings account holders in metro cities has come down to what those in urban areas are supposed to maintain. The biggest lender in the country has also revised the penalties that account holders are supposed to pay for failing to maintain the stipulated balance in their savings accounts. Notably, customers still have to pay GST over and above the fine they have incurred. The new minimum balance rules will be effective from October 1.

Metro

The SBI customers in metro cities of India will have to maintain at least a sum of Rs 3,000 as monthly average balance in their savings account, as opposed to Rs 5,000. If MAB falls between Rs 2,999 and Rs 1,500, then the account holder will have to pay Rs 30 as penalty. Whereas, if the average balance at the end of the month comes out to be anywhere from Rs 1,499 to Rs 750 then the penalty for non-maintenance of MAB will be Rs 40, and  Rs 50 if the MAB is below Rs 750. Earlier, the penalties for these three stages were Rs 50, Rs 75 and Rs 100 respectively.

Urban

The MAB for urban SBI customers remains unchanged, as does the penalty for its non-maintenance. SBI account holders in urban regions of the country will have to maintain Rs 3,000 as monthly average balance, as before. This is same to those for metro city SBI customers. The penalties and conditions for urban area customers will also be the same as SBI clientele from metro cities.

Semi-urban

The MAB for semi-urban areas has been unchanged at Rs 2,000, but penalties for non-maintenance have been slashed for this group. People with savings accounts with SBI branches in semi-urban areas will have to pay fines to the tune of Rs 20 if their MAB is between Rs 1,999 and Rs 1,000, as opposed to Rs 25 before. The semi-urban SBI customer will have to pay Rs 30 if their MAB rests between Rs 999 and Rs 500, and not Rs 50 as they did before. For MAB less than Rs 500, they will now have to pay Rs 40 instead of Rs 75.

Rural

The minimum balance for SBI clientele in rural areas remains unchanged too at Rs 1000, as do most of their penalties for its non-maintenance as per MAB rules. SBI has kept the penalties for rural customers similar to that of its semi-urban clients, at Rs 20 (for MAB between Rs 999 and Rs 500), Rs 30 (for MAB between Rs 499 and Rs 250), and Rs 40 (for MAB at Rs 249 or less).

Exempted from MAB restrictions

Meanwhile, the SBI has also kept certain groups exempted from the restrictions of maintaining a minimum balance at the end of the month, including financial inclusion accounts, basic savings bank deposit accounts, small Accounts, Phela Kadam and Pheli Udaan accounts, minors till the age of 18 years, and all pensioners including recipients of social welfare benefits.