Rule Changed For Minimum Balance Requirement

These Banks Have Removed Minimum Balance Requirement: Full List (2025 Update)

Good news for Indian bank account holders! Several major public sector banks have announced a complete waiver on the Average Monthly Balance (AMB) requirement for savings accounts. This move is seen as a significant relief for millions of customers, especially those from rural and low-income segments. Here's everything you need to know about this major update in the Indian banking sector.

---

What is Average Monthly Balance (AMB)?

Average Monthly Balance (AMB) is the average of the daily closing balances in a bank account during a calendar month. Banks use this figure to assess whether an account holder has maintained a minimum required balance.

Key Points About AMB:

• It is calculated at the end of each month.

• If the AMB falls short of the bank’s minimum requirement, a penalty or charge may be levied.

• The AMB requirement varies by bank and account type.

---

Why Banks Are Removing the Minimum Balance Requirement

The removal of AMB requirements is part of a broader effort by banks to:

• Promote financial inclusion

• Support low-income and rural customers

• Reduce the financial burden on account holders

• Increase customer retention and attract new account holders

---

List of Banks That Have Removed AMB Requirement

Several major Indian banks have recently scrapped their minimum balance requirement. Here’s a detailed look at what each bank has announced:

---

1. State Bank of India (SBI)

• Year of AMB Removal: 2020

• Key Points:

  • SBI was the first major bank to waive off the AMB requirement.

  • Applicable to all types of basic savings accounts.

  • SBI Chairman CS Setty mentioned that this policy has helped first-time account holders significantly.

  • The move has encouraged more people to open accounts and keep them active.

---

2. Bank of Baroda (BoB)

• Effective Date: July 1, 2025

• Key Announcement:

  • No AMB penalty on standard savings accounts.

  • Customers will not face charges even if the AMB is not maintained.

  • Premium savings account holders are not covered under this waiver.

• Why This Matters: The move is aimed at offering greater convenience and financial freedom to regular savers.

---

3. Punjab National Bank (PNB)

• Effective Date: July 1, 2025

• Policy Highlights:

  • No penalty for non-maintenance of AMB in savings accounts.

  • The initiative aims to support priority sectors including:

    • Women

    • Farmers

    • Low-income households

• Official Statement: "This customer-first initiative ensures inclusive access to banking services without balance maintenance stress."

---

4. Indian Bank

• Effective Date: July 7, 2025

• Scope of Waiver:

  • Complete removal of minimum balance requirement across all savings bank accounts.

  • Applies to both urban and rural customers.

• Impact: This step promotes financial accessibility and allows more flexibility for account holders to use their funds without worrying about penalties.

---

5. Canara Bank

• Effective Date: May 2025

• Accounts Covered:

  • Regular savings accounts

  • Salary accounts

  • NRI savings accounts

• Customer Benefit: No AMB penalty across all savings account categories, making it easier for customers to manage finances.

---

6. Bank of India (BOI)

• Policy Change: AMB penalties have been waived off completely for savings accounts.

• Objective:

  • To align with changing market dynamics

  • Enhance financial flexibility

  • Deliver better value to customers

• Focus Areas: This move reflects BOI’s commitment to customer-centric banking practices.

---

Who Benefits the Most from These Changes?

This customer-friendly move is beneficial for a wide range of account holders:

1. Rural Customers

• Often face income irregularities and find it difficult to maintain minimum balances.

• Waiver allows them to continue banking services without fear of penalties.

2. Students and First-Time Account Holders

• Students or new job seekers usually have low account balances.

• AMB removal helps them stay within the formal banking system.

3. Senior Citizens and Pensioners

• They can now use more of their funds without worrying about maintaining a minimum balance.

4. Women and Farmers

• Targeted initiatives like those by PNB support these priority sectors, increasing financial inclusion.

---

Advantages of Zero Minimum Balance Accounts

Here are the benefits of having a savings account with no minimum balance requirement:

• No monthly penalty worries

• Greater liquidity and spending flexibility

• Encouragement to use digital banking services

• Increased accessibility in rural and underbanked regions

• Supports Government of India’s Financial Inclusion goals

---

Important Points to Note

Before you celebrate, here are some things to keep in mind:

• Check the fine print: Some banks apply these waivers only to standard or basic savings accounts, not premium or salary accounts.

• Confirm with your branch: Ensure your account type is included under the AMB waiver.

• ATM and service charges: AMB waiver does not mean free services. Banks may still charge for ATM withdrawals beyond limits, cheque books, and other features.

---

Conclusion

The elimination of the Average Monthly Balance (AMB) requirement by leading public sector banks in India is a major leap toward customer-centric and inclusive banking. Whether you're a student, senior citizen, farmer, or just someone looking for more flexibility with your savings account, these changes offer a great opportunity to manage your money without hidden penalties.

With SBI, Bank of Baroda, Punjab National Bank, Indian Bank, Canara Bank, and Bank of India leading the way, more banks are expected to follow suit in the near future.