New Delhi: The country’s largest lender State Bank of India on Monday lowered the minimum average monthly balance (MAB) requirement in a savings account to 3,000 from 5,000 and also revised downwards penalties for not maintaning such a balance.

The revised MAB requirement and charges will become applicable from October, the bank said in a statement. The public sector lender also decided to exempt pensioners, beneficiaries of social benefits from government and minors from the requirement of minimum balance in savings account.

In April, the bank had re-introduced MAB and charges for non-maintenance of balance after a gap of five years. In metropolitan areas the minimum balance requirement was 5,000. For urban and semi-urban branches, it was fixed at 3,000 and 2,000, respectively, and for rural branches it was 1,000.

“We have decided to treat the metro and urban centres in the same category and the requirement of MAB in metro centres stands reduced to 3,000," the bank said. Last week, managing director for national banking group, Rajnish Kumar, had said the lender was reviewing the average monthly balance requirement.

The lender also revised downwards the penalty for non-maintenance of MAB. “For non-maintenance of MAB, the charges have also been revised downwards ranging from 20-50 per cent across all population groups and categories," the bank said.

Now, the charges at semi-urban and rural centres range from 20 to 40 and at urban and metro centres from 30 to 50, the bank said. Earlier, in the metros, the bank was charging 100 plus GST if the balance fell below 75 per cent of the MAB of 5,000. If the shortfall was 50 per cent or less, the penalty charge was 50 plus GST.

Any shortfall in maintaining minimum average balance in rural areas was attracting a penalty in the range of 20 to 50 plus GST. The bank reiterated that basic savings bank deposit and PM’s Jan-Dhan accounts are not required to maintain the minimum balance. The lender has 42 crore savings bank accounts of which 13 crore belong to this category.

“It has now been decided to exempt the pensioners, beneficiaries of social benefits from government and accounts of minors. The revision is likely to benefit another 5 crore account holders," the bank said.

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