In a major relief to small depositors, the state-owned State Bank of India (SBI) waived off charges for non-maintenance of average monthly balance (AMB). The waiver will cover India's largest lenders' all 44.51 crore savings bank accounts.

So far, SBI mandated its savings account customers to maintain an average monthly balance of Rs. 3000, Rs. 2000 and Rs. 1000 in the metro, semi-urban and rural areas respectively. The Bank charged a penalty of Rs. 5 to Rs. 15 plus taxes on non-maintenance of average monthly balance from its customers.

State Bank of India, SBI
A man stands outside a State Bank of India branch in Gurugram on May 31, 2018IANS

A report published in Mint added that the SBI has also done away with the SMS charges. Moreover, it has also rationalized interest rates to a flat 3 per cent annually on the savings bank account. According to the latest rates, deposits up to Rs. 1 lakh would fetch 3.25 per cent of interest rate while deposits above one lakh would draw an interest rate of 3 per cent.

In an official statement, SBI Chairman Rajnish Kumar said, "This announcement will bring in more smiles and delight to our valuable customers. We believe this initiative would empower our customers towards banking with SBI and boost their confidence in SBI."

Cut in MCLR by State Bank of India

Rajnish Kumar
chairman of State Bank of India (SBI), Rajnish Kumar speaks during a news conference in Mumbai, India REUTERS/Shailesh AndradeReuters

Notably, SBI is India's largest lender considering assets, deposits, branches, customers and employees. The public sector bank is also the largest mortgage lender in the country. By the end of December 31, 2019, the bank has a massive base of more than Rs. 31 lakh crore with 21,959 branches across the country.

Earlier on Wednesday, SBI had already announced slashed MCLR or marginal cost of fund-based lending rate by up to 15 basis points that would come into effect from March 10. The move will infuse some liquidity in the market as it would make home and auto loans cheaper.

SBI cut down its one-year MCLR by 10 basis points from 7.85 per cent earlier to 7.75 per cent. Interestingly, since the start of running fiscal SBI has already slashed the MCLR rate by 10th consecutive times. Besides, interest rates on fixed deposits or FD were also cut.