1. State Bank of India Eases Minimum Balance Rules On Savings Accounts.
State Bank of India has lowered its minimum balance requirement for savings accounts and the fee applicable for not maintaining it, just four months after it re-introduced such charges.
The minimum average balance requirement in metro cities has been revised to Rs 3,000 from Rs 5,000 earlier, SBI said in a media statement. The charges for non-maintenance of minimum balance has also been cut by 20-50 percent across all categories, the statement said.
In April, SBI had brought back charges for not maintaining the minimum balance after a gap of five years. An amount of Rs 100 plus taxes would be charged if the savings account balance fell below 75 percent of the minimum requirement in metros, SBI had said. The penalty was implemented to help the bank recover costs of Jan Dhan accounts which offer zero balance, free insurance cover and overdraft facilities. Last week, it had called for a review of the minimum balance fee after receiving feedback from customers.
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SBI has around 42 crore savings bank accounts, of which 13 crore were already exempt. The new revision is likely to benefit another 5 crore account holders, SBI said.
Jan Dhan accounts were already exempt from the minimum balance requirement and the fee related to it. The other categories which have now been excluded from the minimum requirement are financial inclusion accounts, basic savings bank deposit accounts, small accounts, accounts of minors and pensioners and those who receive social welfare benefits, the statement added.
The revised requirement and charges will be applicable from October 2017.
Shares of SBI had closed 1.2 percent lower ahead of the anounncement, while the country`s benchmark BSE Sensex closed 0.9 percent lower.
2. Asian Development Bank to Increase Annual Lending to India to $4 billion.
The Asian Development Bank (ADB) on Wednesday said it is planning to raise its annual lending to India from an average $2.65 billion per year at present to $4 billion to help propel Asia’s third largest economy towards upper middle-income status.
In 2016, ADB assistance to all its 67 member countries totalled $31.7 billion, including $14 billion in co-financing.
In a new ADB Country Partnership Strategy (CPS) for the next five years (2018-22) and endorsed on Wednesday, the multilateral lender said during the period, it will focus on three pillars of activities: boosting economic competitiveness to create more and well-paid jobs; improved access to infrastructure and services; and addressing climate change and improving climate resilience.
On Tuesday, ADB pared its economic growth projection for India to 7% in 2017-18 from 7.4% projected earlier, blaming short-term disruptions like demonetization and the rollout of goods and services tax (GST). About 85% of its lending will be focused on transport, energy, and urban infrastructure and services. Other finance will be aimed at public sector management, agriculture, natural resources and rural development, as well as skills development and urban health.
ADB will also complement its lending by technical assistance to help undertake strategic studies, build capacities, and prepare projects. ADB will also explore co-financing opportunities, including climate funds for relevant projects.
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“ADB’s new five-year partnership with India supports the government’s goal of inclusive and sustainable growth grounded by economic structural transformation and job creation, with an increased focus on low-income states,” said Kenichi Yokoyama, ADB country director in India. “We aim to assist transformative investments, deliver holistic solutions removing sectoral boundaries, and demonstrate high value addition of our assistance in terms of innovation, timeliness, efficiency, and quality,” he added.
To accelerate India’s economic growth and good track record in poverty reduction, ADB said the country needs to create more high-quality jobs since half of India’s workforce is based around agriculture, which is still marked by low productivity and incomes. Infrastructure continues to be a major bottleneck, in which ADB has identified an investment shortfall of $230 billion a year. Other critical challenges include how to close the persistent gap between advanced and lagging regions where most of the poor are concentrated, environmental degradation exacerbated by the impacts of climate change, and building capacity within the country’s institutions.