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Smart Business Account FAQs
What is MAB and how is it calculated?
MAB or Monthly Average Balance is the average of day end balances in the account for all the days in a month. Given below is an example of how MAB is calculated:
A sample bank statement of March 2013:
| Date | Transactions | Debit Amount | Credit Amount | Balance at the end of day |
|---|---|---|---|---|
| 1-Mar-2013 | A | - | 10,00,000 | 10,00,000 |
| 10-Mar- 2013 | B | 1,00,000 | - | 9,00,000 |
| 20- Mar-2013 | C | 2,00,000 | 3,00,000 | 10,00,000 |
| 31-Mar-2013 | D | 5,00,000 | - | 5,00,000 |
| MAB | 7,74,193 |
MAB Calculation:
Total Balance in March 2013
= (10,00,000 * 9 days) + (9,00,000 * 10 days) + (10,00,000 * 11 days) + (5,00,000 * 1 day)
= 24,000,000 (2.4 Cr)
Total No. of days in the month = 31
Monthly Average Balance (MAB) of March 2013
= 24,000,000/ 31
= Rs. 7,74,193
What if I maintain an MAB higher than Rs. 25,000 in a month?
If the customer maintains an MAB higher than Rs. 25,000, the customer will get free limits as a multiple of the balance maintained or Rs. 1.2 Crore, whichever is lower. Thus, a higher balance will provide for higher free limit as given in the features. Given below is a sample of how the free limits work:
| MAB Maintained (Rs) | Cash deposit in the month anywhere (Rs) | Cash deposit free upto Rs (12 * MAB) | Cash deposit not free (and chargeable) Rs |
|---|---|---|---|
| 50,000 | 10 Lacs | 6 Lacs | 4 Lacs |
| 50,000 | 5 Lacs | 6 Lacs | 0 |
| 10 Lacs | 1 Cr | 1.2 Cr | 0 |
| 10 Lacs | 1.5 Cr | 1.2 Cr | 30 Lacs |
| 30 Lacs | 2 Cr | 1.2 Cr | 80 Lacs |
What if I do not maintain the required MAB of Rs. 25,000?
Scenario 1: MAB for the month is less than Rs. 20,000
Result: Customer will be charged a non maintenance charge of Rs. 1,000 for that month and will not gain any of the above mentioned free limits
Scenario 2: MAB for the month is more than Rs. 20,000 but less than Rs. 25,000
Result: Customer will be charged a non maintenance charge of Rs. 1,000 for that month. But, the customer will be eligible for all the free limits as given in features section.
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