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Saturday, July 29, 2017

How to calculate SBI monthly average balance minimum balance penalty fine


SBI(State Bank of India) now a largest bank in India after merging with 5 associate banks(State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT)) and BMB.  SBI now has become a large bank with more than 39 crore accounts with 24000 branches and more than 50000 ATMs all over India. Recently SBI has declared to improve its facility to its customers by providing facilities which private and international banks provide.  With this SBI has also declared to charge of fees for non maintaining of account balance. Minimum account balanced will be calculated based on monthly average balance. This section will give you the technique to calculate your minimum charge fees for your SBI account. Remember that SBI will charge maximum of rupees 100(service tax will be added with this). SBI has segmented the branches based on location, for metro city branches MAB is 5000, For urban MAB 3000, for semi urban MAB 2000 and for rural MAB is 1000.


How to calculate SBI monthly average balance or minimum balance fine

SBI tweet display the MAB and fees

Before discussing about how to calculate monthly average balance first need to know about MAB of monthly average balance.

What is MAB or monthly average balance ?

It is nothing but the addition of all day’s closing balance in a month and dividing it with number of days in that month.
Basic formula is:
MAB= (Sum of all end of the day closing balance)/Number of days in a particular month
If you want to understand this clearly then follow the below example. The following example has been given for rural area SBI account holders.


MAB(Monthly average Balance calculation for the month of January 2017


Day
Debit
Credit
EOD closing balance
1


5000
2
3000

2000
3


2000
4


2000
5


2000
6


2000
7


2000
8


2000
9


2000
10


2000
11


2000
12


2000
13


2000
14


2000
15


2000
16
1000

1000
17


1000
18


1000
19


1000
20


1000
21


1000
22


1000
23


1000
24


1000
25


1000
26


1000
27


1000
28


1000
29


1000
30


1000
31


1000


For this case MAB will be

Explanation: Day 1 EOD closing balance is 5000 and from day 2nd  to day 15th i.e is 14 days. Therefore 14*2000. From 16th to 31st EOD 1000 is maintained therefore 16*1000.
MAB= {(5000+(2000*14)+(1000*16)}/31
         = 1580.64

This MAB is appropriate for rural areas where MAB is 1000.

Similarly you can calculate for metro, urban and semi urban cities account holders.

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