SBI lending rates cut to 9.10%, minimum balance hiked

04 Apr 2017 | By Abheet Sethi

On Monday, State Bank of India (SBI), which is flushed with liquidity, reduced its base rate by 15 basis points from 9.25% to 9.10% with effect from April 1, 2017.

SBI's lowered lending rates could cause a rate cut war among banks.

SBI also increased the minimum account balance and charges for not maintaining it, which will impact millions of customers.

In context: SBI: Lending rates cut, minimum balance hiked

07 Mar 2017SBI hiking minimum balance for savings account from April 1

In March, State Bank of India (SBI) announced it will increase the minimum balance required to maintain a savings account.

The monthly average balance (MAB) rules will impact 31 crore depositors, including students and pensioners.

The MAB requirement ranges from Rs. 1,000-5,000. Failure to maintain MAB would attract penalties.

The MAB benchmarks and penalties would likely be followed by other public sector banks.

04 Apr 2017SBI lending rates cut to 9.10%, minimum balance hiked

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SBI doesn't change marginal cost-based lending rate

The lower lending rates are sure to bring cheer to borrowers. SBI's marginal cost-based lending rate (MCLR), the bank's minimum interest rate below which it can't lend, remains the same. The six-month MLCR rate is 7.95% and the three-year rate is 8.15%.
MAB for six metros Rs.5k, urban-Rs.3k, rural-Rs.1k

MAB explainedMAB for six metros Rs.5k, urban-Rs.3k, rural-Rs.1k

The monthly average balance (MAB) for branches in India's six metros will be Rs. 5,000. Penalty for non-maintenance of minimum balance is between Rs. 50-100.

For urban, semi-urban and rural branches, the MAB has been fixed at Rs. 3,000, Rs. 2,000 and Rs. 1,000 respectively.

In rural branches, failure to maintain MAB will attract a penalty ranging from Rs. 20-50.

New decisions apply to SBI's recently merged 5 associated banks

On April 1, SBI got merged with State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad. The SBI's decision also applies to its five associated banks and Bharatiya Mahila Bank.