State Bank of India has decided to increase manifold the minimum balance required for maintaining savings account from April 1, hitting 31 crore depositors including pensioners and students.
The monthly average balance (MAB) requirement has been increased to as high as Rs 5,000 for branches in six metros.
Savings bank account holders of SBI and its five associates (merging with it on April 1) will have to maintain the monthly balance or else they will invite a penalty ranging from Rs 20 (rural branches) to Rs 100 in (metro cities).
SBI has 31 crore savings bank accounts.
As of now, monthly average balance (MAB) for a savings bank account is Rs 500 without facility of cheque book and Rs 1,000 with cheque book across the country.
India's largest bank has now decided to fix separate MABs for 'metro', 'urban', 'semi-urban' and 'rural' areas from the beginning of next financial year.
Also read: SBI to impose fine from April 1 if account-holders fail to maintain minimum balance
The benchmark for MAB and penalties are likely to be followed by other public sector banks.
MAB for metro branches will be Rs 5,000 and penalty for non-maintenance of minimum balance will be between Rs 50 and Rs 100. For urban and semi-urban branches, the MAB has been fixed at Rs 3,000 and Rs 2,000 respectively.
In case of rural branches, the minimum balance has been fixed at Rs 1,000. Breach of MAB will attract a penalty ranging between Rs 20 and Rs 50.
Also read: Cabinet gives green signal to SBI merger with 5 associate banks
Five associates banks of SBI -- State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH) -- will merge with the parent on April 1.
With the merger of all the five associates, SBI is expected to become a lender of global proportions with an asset base of Rs 37 trillion (Rs 37 lakh crore) or over USD 555 billion, 22,500 branches and 58,000 ATMs. It will have over 50 crore customers.