SBI reverses stance on minimum account balance

Customers of State Bank of India would need to keep a minimum balance in their savings accounts, at least for now.

This became clear after the bank directed branches to ‘keep in abeyance' the waiver of service charges for non-maintenance of minimum balance.

LATEST CIRCULAR

In February, an e-circular had announced the waiver as a ‘major step forward towards customer retention and acquisition.'

This is now sought to be reversed and kept in abeyance according to another circular dated April 4.

“It has been decided to keep in abeyance the instructions contained in our e-circular dated February 22.” The latest circular went on to add: “The effective date of removal of charges for non-maintenance of minimum balance in SB accounts of customers will be advised in due course.”

SELLING POINT

The bank had earlier said that the waiver would be a ‘strong selling point for our savings bank product.'

An accountholder could be induced to make use of other products, besides cross selling of those of subsidiaries.

Branches needed to ensure that while opening a savings bank account, a minimum of Rs 100 had to be deposited. In the case of no-frills account, the minimum deposit would be Rs 50.

Branches were also instructed to open new accounts by highlighting the benefits of non-maintenance of minimum balance.

NEW ACCOUNTS

Sources in the bank said that the bank had witnessed a flurry of new account openings across the country after the waiver was announced.

A situation had been reached when the numbers grew beyond the ‘comfort level' of the bank, and hence the latest move.

It is now a switch-back to the earlier regime when the quarterly minimum balance was fixed at Rs 225 a quarter, the sources added.

(vinson@thehindu.co.in)