Govt asks SBI to review penalty over minimum balance, transaction fees

New Delhi : To provide relief to the customers, the government asked country’s largest lender State Bank of India (SBI) to review its decision to levy penalty on non-maintenance of minimum balance.  Earlier, the bank had announced changes in its policy to hike manifold from April 1 impacting over 31 crore savings bank account holders.

It has also been asked to reconsider charges it proposes to levy on cash transactions and ATM withdrawals over specified limits.

The country’s largest lender has announced imposing penalty ranging from Rs 20-100 on non-maintenance of Minimum Average Balance (MAB) in savings bank accounts from April 1.  The penalty is as high as Rs 500 in case of current accounts.

The bank has also increased the minimum balance requirement by many times, which is as high as Rs 5,000 for account maintained with branches in six metro cities.

SBI has also imposed restrictions on withdrawals of cash from its branches as well as ATMs. These will attract charges after certain specified limits.

“Government has asked SBI to reconsider it’s decision to impose a penalty on non- maintenance of minimum balance in accounts from April 1 onwards,” the source said.

The government has also urged SBI and other lenders, including private sector banks to “reconsider the charges on cash transactions and ATM withdrawals above a certain limit”.

Some private banks, like HDFC Bank, ICICI Bank and Axis Bank, have started charging a minimum amount of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.