The SBI sent emails to its credit card holders informing them about the changes. “With effect from 15 Mar 2024, the definition for Minimum Amount Due (MAD) will be revised,” it said.
The State Bank of India is the country’s largest public sector bank and is often called the ‘banker of every Indian’. The bank is also the country’s second largest credit card issuer with over 18 million credit cards in force. Thus, any changes made by the bank in its credit card policy affect a large number of people. The SBI recently announced some changes in how it used to calculate the Minimum Amount Due (MAD) for its credit card users. The changes will come into effect from March 15.
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The SBI sent emails to its credit card holders informing them about the changes. “With effect from 15 Mar 2024, the definition for Minimum Amount Due (MAD) will be revised,” it said. It also shared the current MAD calculation regime and the changes proposed thereof.
Current MAD Method
Existing MAD Calculation = Total GST + EMI amount + 100% of Fees/Charges + 5% of [Finance Charge (if any) + Retail Spends and Cash Advance (if any)] + Overlimit Amount (if any).
Revised MAD Method
Revised MAD Calculation = Total GST + EMI amount + 100% of Fees/Charges + 5% of [Finance Charge(if any) + Retail Spends and Cash Advance (if any)] + Overlimit Amount (if any).
While the calculation appears the same, the main changes are in the cases where the 5% amount is less than the finance charges. “In case 5% of (Finance Charge + Retail Spends and Cash Advance) is less than Finance Charges, then the MAD calculation will be Total GST + EMI amount + 100% of Fees/Charges + 100% of Finance Charges + Overlimit Amount (if any),” said the bank in its mailer.
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While this will not affect the total bill amount, the Minimum Amount Due is likely to witness a little spike but that may not bother the SBI credit card users because it won’t add any additional amount in the final bill.
