SBI's July-Nov earning from this fine was over 50% of its net profit in H1

State Bank of India, the country’s largest lender, made a whopping Rs 17.7 billion in charges levied on customers failing to maintain their minimum monthly average balance during the April-November 2017 period, according to media reports quoting finance ministry data.

Annual growth in the bank’s revenue on this count cannot be arrived at as SBI had collected no money from customers for not maintaining average balance during the comparable period in 2016. However, the Rs 17.7 billion figure is bigger than the bank’s net profit of Rs 15.82 billion in the July-September quarter and almost half the Rs 35.86 billion it earned in the first half of the financial year (April-September 2017).

According to an Indian Express report, 1.3 billion of SBI’s 4.2 billion savings bank accounts are those under the Pradhan Mantri Jan Dhan Yojana or basic savings bank deposits accounts – both of which are exempt from penalty for not maintaining average balance. So, these charges would have been levied on defaulting accountholders among the remaining 2.9 billion.

On Monday, the first day of the new calendar year, SBI had surprised its customers by announcing a 30-basis-point reduction in benchmark prime lending rates (BPLR) with effect from the same day.

The bank had said it would also extend its ongoing waiver on home loan processing fee until March 31 for new customers and for those switching their loans from other banks to SBI.

SBI Managing Director (retail and digital banking) P K Gupta had said the move would benefit about 8 million customers.

The revised base rate for the bank is now 8.65 per cent, while the BPLR is 13.40 per cent. The base rate is the minimum rate that a bank can offer to its customers.

“The reduction in the base rate is a New Year gift to the bank's loyal customers, as a large number of consumers who have their loans linked to the base rate will benefit. This reduction is part of the bank's efforts to ensure transmission of the reduction in policy rates of the recent past,” Gupta had said.