SBI May Reduce Minimum Balance Requirement for Savings Accounts

Currently, the SBI has stipulated a minimum balance requirement of Rs 3,000 for metros and Rs 1,000 for rural areas.

Photo used for representational purposes.

(Photo: Reuters)

The State Bank of India (SBI), India's largest public sector bank, may be looking to reduce its minimum balance requirement for savings accounts, according to various media reports.

Currently, the SBI has stipulated a minimum balance requirement of Rs 3,000 for urban areas, Rs 2,000 for semi-urban areas and Rs 1,000 for rural areas. Sources indicate that the rate for urban areas might come down to Rs 1,000.

Reports suggest the average balance requirement will be considered on a quarterly basis, instead of a monthly one.

The speculation about these reforms comes in a context where SBI is facing pressure from the government, as well as criticism, for earning Rs 1,771.67 crores after charging penalties from customers for failure to maintain minimum balance from April to November 2017.

Earlier, the minimum balance requirement was Rs 5,000 for urban areas, but that was brought down to Rs 3,000 eventually.

According to a Times of India report, while the minimum balance requirement stipulated by SBI is the lowest when compared to prominent private sector banks, it is higher than many other public sector banks.

Regarding the purported development, Praveen Kumar Gupta, Managing Director, Retail and Digital, SBI, told Moneycontrol:

We brought it (minimum balance limit) back in April and we reviewed in October, now also, we are in the process of reviewing it. It should happen very soon. We will do a comprehensive review. We have got some feedback. Based on the feedback, we will take a view.