State Bank of India (SBI) has announced waiver of service charge for non-maintenance of minimum balance stipulations with respect to savings accounts.

A circular addressed to Chief General Managers of all circles dated February 14 said that the waiver is being looked upon as a ‘major step forward towards customer retention and acquisition.'

CBS TO TAKE CARE

“You will appreciate that this benefit/waiver is a strong selling point for our savings bank product,” the circular said.

Once a customer becomes a savings bank accountholder, he can be induced to make use of other products, besides-cross selling of the products of subsidiaries.

The circular clarified that branches would not have to manually intervene as CBS will take care of waiver of charges automatically.

“Branches will however ensure that while opening a savings bank account, a minimum of Rs 100 is to be deposited, except in the case of ‘No Frills Account', where the minimum deposit is Rs 50,” the circular said.

RBI POSITION

The circle heads have been directed to issue instructions to all branches/offices under their control and ensure that branches open new accounts by highlighting the benefits of non-maintenance of minimum balance.

The circular adds that the Corporate Centre of the bank is arranging to provide publicity material/advertisements/leaflets to announce the new initiative.

The Reserve Bank had clarified sometime back that it has not stipulated any minimum balance to be maintained in savings accounts.

Nor has it stipulated levy of any service charge, if the minimum balance is not maintained in such accounts.

Such stipulations are made by individual banks themselves, as per their board-approved policies.

But it has advised banks that they should inform their customers with regard to the requirement of minimum balance at the time of opening savings accounts and levying of charges, and so on, if the minimum balance is not maintained.

Any change in regard to minimum balance should also be intimated to the accountholders by banks at least one month in advance.