SBI Minimum Monthly Average Balance Rules, Penalty Charges

Customers holding Savings Bank Accounts and Current Accounts have to maintain a monthly average balance stipulated by their respective banks. The monthly average balance varies from bank to bank and also depends on the location of the branch.

What is Monthly Average Balance?

The Monthly Average Balance is the sum of End of Day Balances divided by the number of days in the particular month. The monthly average balance stipulated by the banks depends on the location of the branch.

SBI Rules for Minimum Monthly Average Balances for Savings Account

The minimum average balance stipulated varies as per the location of the State Bank of India (SBI) branch. Customers holding Savings Bank Account with SBI need to maintain a monthly average balance ranging between 1,000 to 3,000 depending on the location of the branch. On failing to maintain the monthly average balance customers have to pay a penalty depending upon the percentage shortfall in comparison with the stipulated amount and also depending upon the location of the branch.

SBI branches are divided into four categories depending on their location, i.e., metro branches, urban branches, semi-urban branches, and rural branches.

  • Customers maintaining Savings Account in metro and urban branches have to maintain a minimum average balance of 3,000.
  • Customers maintaining Savings Account in semi-urban branches have to maintain a minimum average balance of 2,000.
  • Customers maintaining Savings Account in rural branches have to maintain a minimum average balance of 1,000.

Penalty Charges for Non-maintenance of Monthly Average Balance

In the event of non-maintenance of monthly average balance as stipulated by the bank, penal charges will be applicable to the account depending on the degree of the shortfall from the stipulated minimum balance and the location of the branch.

  • Banks will notify the customers vide SMS/ e-mail/ letter about the non-maintenance of the minimum balance and will also mention that if the customer does not restore the minimum average balance within 30 days after receiving the notice, there will be penal charges applicable.
  • In case the minimum balance is not restored within 30 days from the date of notice bank will collect penal charges under intimation to the customer.
  • The policy on the penal charges so collected will be decided with the approval of the Board of the Bank.
  • The penal charges applicable depend on the percentage of the shortfall between the balance maintained and the stipulated minimum average balance. The penal charges applicable also depend on the location of the branch.
  • Penal charges will not be levied on inoperative accounts

The table below is indicative of the different slabs of penal charges that are applicable depending upon the degree of the shortfall and the location of the branch.

Metro branches Penalty applicable

For shortfall less than 50%

10 + GST

For shortfall above 50% and up to 75%

12 + GST

For shortfall above 75%

15 + GST

Urban branches

 

For shortfall less than 50%

10 + GST

For shortfall above 50% and up to 75%

12 + GST

For shortfall above 75%

15 + GST

Semi-Urban branches

 

For shortfall less than 50%

7.50 + GST

For shortfall above 50% and up to 75%

10 + GST

For shortfall above 75%

12 + GST

Rural branches

 

For shortfall less than 50%

5 + GST

For shortfall above 50% and up to 75%

7.50 + GST

For shortfall above 75%

10 + GST

Exceptions to the Monthly Average Balance Rules

The following accounts are exempted from maintaining the Monthly Average Balance:

  • Financial Inclusion Accounts
  • PMJDY Accounts
  • No Frill Accounts
  • Salary Package Accounts
  • Basic Savings Bank Deposit Accounts
  • BSBDA Small Accounts
  • Pehla Kadam and Pehli Udaan Accounts
  • Saving Accounts for Minors
  • Pensioners' Account of all categories
  • Recipients of Social Security Welfare Benefits (Direct Benefits)
  • Accounts of Students up to the age of 21 years

Monthly Average Balance Rules for Different Types of SBI Current Accounts

There are various categories of SBI Current Accounts and the Monthly Average Balance to be maintained differs for each account.

  • Regular Current Account: This account is suitable for Small Businessman, Professionals, and Traders who need an account with nominal charges for all the facilities offered.
  • Gold Current Account: This account type is suitable for Premium Businessmen, Professionals, and Traders who have bulk cash transactions. There are numerous additional services offered for this account with nominal charges which will considerably reduce the cost of transactions.
  • Diamond Current Account: This category of the current account is best suited for Elite Businessman, Top professionals, and Traders across the country who have bulk cash transactions and who have to make a large number of payment and collection transactions. Additional services free of cost or at a nominal charge are also provided for these accounts.
  • Platinum Current Account: The feature of free cash pickup and unlimited free cash deposit facility makes this account ideal for every Businessman, Professional, Trader, Corporate, and Institutions.
  • Power POS Current Account: This is a special account for customers availing the POS facility. There is no minimum average balance stipulation for this account. Overdraft facility is available for this account.
  • Surbhi Current Account: This account provides a sweep facility for Corporates, Institutions, and Trusts. It provides a sweep and reverse sweep for Corporate Liquid Term Deposits.
  • Power Jyothi Current Account: The account is mainly meant for collection of funds at all SBI branches across the country. The main advantage of this account is that the remitter can send funds without having an account with SBI. This account is best suited for Educational Institutions, Firms, and Government Bodies for collection of fees/ funds/ fines.
  • Power Jyothi PUL Current Account: This account provides customised fees/ funds collection for Institutions/ Companies/ Firms through core banking branches and Internet Banking with pre-loaded data feature.

The minimum Monthly Average Balance details for the above-mentioned accounts are as detailed below:

Name of the Current Account Minimum Monthly Average Monthly Balance Penalty for Non-maintenance of Monthly Average Balance

Regular Current Account

10,000

500 + GST per month

Gold Current Account

1,00,000

2,000 + GST per month

Diamond Current Account

5,00,000

  • 4,000 + GST per month if Monthly Average Balance is less than 2,50,000
  • 2,000 + GST per month if Monthly Average Balance is more than 2,50,000

Platinum Current Account

10,00,000

  • 8,000 + GST per month if Monthly Average Balance is less than 5,00,000
  • 4,000 + GST per month if Monthly Average Balance is more than 5,00,000

Power POS Current Account

5,000

500 + GST per month

Surbhi Current Account

10,000

500 + GST

Power Jyothi Account

50,000

1,000 + GST

Power Jyothi PUL Current Account

50,000

1,000 + GST

Importance of Maintaining the Minimum Monthly Average Balance

Minimum Average Monthly balance is the sum of all closing day balances for a month divided by the number of days in that particular month. Maintaining the minimum balance is very important to avoid penalty levied by the bank.

The cost of the transactions will be very high especially for some categories of SBI current accounts wherein the minimum monthly average balance is a few lakhs. The penalty charged is as high as 8,000 for some categories of the current account by SBI.

It is thus necessary to maintain the minimum balance in the account to avoid penalties.

Frequently Asked Questions

What is the Monthly Average Balance?

The Monthly average balance is the sum of End of Day Balances divided by the number of days in the particular month. The monthly average balance stipulated by the banks depends on the location of the customer

What is the Monthly Average Balance stipulated for SBI Savings Account?

SBI branches are divided into four categories depending on their location, i.e., metro branches, urban branches, semi-urban branches and rural branches.

  • Customers maintaining Savings Account in metro and urban branches have to maintain a minimum average balance of 3,000.
  • Customers maintaining Savings Account in semi-urban branches have to maintain a minimum average balance of 2,000.
  • Customers maintaining Savings Account in rural branches have to maintain a minimum average balance of 1,000.

What happens in the event of non-maintenance of minimum balance?

In the event of non-maintenance of minimum balance, a penalty will be levied which depends on the degree of shortfall in comparison with the Monthly Average Balance stipulated and also depends on the location of the SBI branch.

What are the exceptions to the Monthly Average Balance Rules?

The following accounts are exempted from maintaining the Monthly Average Balance:

  • Financial Inclusion Accounts.
  • PMJDY Accounts
  • No Frill Accounts
  • Salary Package Accounts
  • Basic Savings Bank Deposit Accounts
  • BSBDA Small Accounts
  • Pehla Kadam and Pehli Udaan Accounts
  • Saving Accounts for Minors
  • Pensioners' Account of all categories
  • Recipients of Social Security Welfare Benefits (Direct Benefits)
  • Accounts of Students up to the age of 21 years

What is the importance of maintaining Monthly Average Balance?

Though it is important to maintain Monthly Average Balance, most of the times it is ignored. Minimum balance has to be maintained to avoid penalties especially in current accounts where the penalty levied is much higher compared to the penalty levied for Savings Accounts. The cost of the transactions will be higher in the case of current accounts if Monthly Average Balance is not maintained.

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