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.

SBI tweet display the MAB and fees

A regular review of your account will help you to ensure the average monthly balance is maintained and avoid the minimal charges. pic.twitter.com/bZSwWRW134

— State Bank of India (@TheOfficialSBI) 22 April 2017

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 2^nd  to day 15^th i.e is 14 days. Therefore 14*2000. From 16^th to 31^st 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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