Asia: State Bank of India lowers minimum monthly balances across the board

India’s government-owned corporation – State Bank of India (SBI) recently revised its minimum standard for average monthly balance (MAB) for retail banking accounts, as well as reducing the penalties for a balance lower than required.

Previously the minimum balance required was INR 5,000 (equals to USD $75) in the big cities, INR 3,000 (USD $45) in urban cities and INR 1,000 (USD $15) in rural. On top of this, there were penalties of INR 50 - INR 100 when the minimum balance fall below requirement on INR 5,000.

According to SBI there were 130 million saving accounts affected by this regulation which drove the bank to adjust their minimum balance and the penalties. Under the new policy, accounts in big cities and urban cities will be treated the same and require MAB of INR 3,000.

Pensioners, beneficiaries of social supports from governments and minors are exempted from meeting this MAB. Penalties for failing to meet the MAB was lowered to INR 20 - INR 50. The bank believes that the new requirement will benefit around 50 million account holders and will be effective starting October this year.

According to RFi Group, SBI is one of the most popular banks in India. More than one out of two banked customers in India (56%) holds a relationship with the bank.

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