The country's largest bank, State Bank of India (SBI), has discarded the minimum balance requirement for its savings bank account. Until now, customers of the bank having normal savings bank account with cheque book, were required to maintain a minimum balance of Rs.1000, failing which the bank levied a penalty.
In an advertisement, the bank said that the new facility will also be extended to the existing savings account holders of the bank.
The new facility has been introduced in a bid to bring in new customers to the bank. An official of the bank said that this step would help the bank in boosting its customer base and also aid in creating more low cost deposits, as normal saving accounts earn an interest rate of just 4 percent.
SBI opened 2.19 crore savings bank account last fiscal taking the total number of savings account of the bank to 15.39 crore.
It should be noted that the minimum balance criteria for savings account of private lenders is much more than that of SBI's. For instance, ICICI and HDFC have set the minimum balance criteria at Rs.10, 000, for an individual with an account in any of the metros.
Likewise, foreign banks such as Citibank have set the minimum balance requirement at Rs. 25,000, for savings bank accounts in metros.