GG News Bureau
New Delhi, 8th July: In a significant move aimed at enhancing customer convenience and promoting financial inclusion, several major public sector banks in India have waived the mandatory requirement of maintaining an Average Monthly Balance (AMB) in savings accounts. Banks that have adopted the new policy include Bank of Baroda, Punjab National Bank, Indian Bank, Canara Bank, and Bank of India, among others.
The development brings relief to millions of account holders who were previously required to maintain a certain minimum balance every month to avoid penalties.
The Average Monthly Balance (AMB) is the average amount a customer must maintain in their savings or current account during a calendar month. Failure to do so often results in penalty charges, depending on the account type and bank policy.
Bank of Baroda has waived AMB charges for all standard savings accounts effective July 1, 2025. However, the waiver does not extend to premium savings schemes.
Punjab National Bank also announced the removal of penalties for non-maintenance of minimum balance starting July 1, 2025. In a press statement, the bank said the move is aimed at promoting financial accessibility, especially for women, farmers, and low-income households.
Indian Bank has removed the minimum balance requirement for all savings accounts effective July 7, 2025, while Canara Bank implemented a similar waiver across regular, salary, and NRI savings accounts in May 2025.
Bank of India has also discontinued AMB penalties, aligning its policy with evolving market expectations and customer needs.
State Bank of India (SBI) was the first among public sector banks to take this step back in 2020. SBI Chairman CS Setty recently said the policy has significantly helped first-time account holders enter the banking system with ease.
These decisions are expected to increase the reach of formal banking services and provide greater flexibility to customers, particularly in rural and low-income segments.
Customers are advised to check with their respective banks for detailed terms and applicability across account categories.
