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Banks Waive Minimum Balance Requirements in 2025: Check the List

In a significant move toward financial inclusion, several major Indian public sector banks have eliminated the Average Monthly Balance (AMB) requirement for savings accounts, effective in 2025. This change, aimed at reducing the financial burden on customers—particularly low-income households, students, and rural account holders—has been welcomed as a customer-centric reform. Banks such as State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BoB), Canara Bank, and Indian Bank have led the charge, waiving penalties for non-maintenance of minimum balance across various account types. This blog explores the details of these changes, the banks involved, and the implications for customers, drawing from recent announcements and expert insights.

What Is the Average Monthly Balance (AMB)?

The AMB is the minimum average amount a customer is required to maintain in their savings account each month, calculated by averaging the daily closing balances over a month. Failure to maintain this balance typically results in penalties, which vary based on the bank, account type, and location (urban, semi-urban, or rural). These charges have often been a source of frustration for customers, especially those with fluctuating incomes or limited savings. The recent waivers by major banks aim to eliminate this burden, making banking more accessible and stress-free.

List of Banks That Have Removed Minimum Balance Requirements

Below is a comprehensive list of major Indian banks that have abolished the AMB requirement for savings accounts in 2025, along with key details:

1. State Bank of India (SBI)

   • Effective Date: March 11, 2020 (continued in 2025)
   • Details: SBI, India’s largest public sector bank, was a pioneer in this space, removing the minimum balance requirement for all savings accounts in 2020. This policy remains in place in 2025, ensuring no penalties for low balances across regular savings accounts, basic savings accounts, and accounts linked to government schemes like the Pradhan Mantri Jan-Dhan Yojana (PMJDY). SBI Chairman CS Setty noted that this move has significantly benefited first-time account holders and low-income customers.
   • Note: Unverified social media posts in 2025 suggested SBI might reintroduce a ₹1,000 minimum balance requirement from April 2025, but no official confirmation has been made. Customers are advised to check SBI’s official website for updates.

2. Punjab National Bank (PNB)

   • Effective Date: July 1, 2025
   • Details: PNB has eliminated penalties for non-maintenance of minimum balance across all savings account schemes, including regular, salary, and other account types. Previously, PNB required a Quarterly Average Balance (QAB) of ₹3,000 in urban areas, ₹2,000 in semi-urban areas, and ₹1,000 in rural areas, with penalties ranging from ₹400 to ₹600 for non-compliance. This waiver benefits senior citizens, women, students, and low-income families, promoting hassle-free banking.

3. Bank of Baroda (BoB)

   • Effective Date: July 1, 2025
   • Details: BoB has waived charges for non-maintenance of minimum balance in all standard savings accounts, effective July 1, 2025. This initiative targets priority segments like women, farmers, and low-income households. However, the waiver does not apply to Premium Savings Account schemes, which may still require a minimum balance. Customers should verify their account type to confirm eligibility.

4. Canara Bank

   • Effective Date: June 1, 2025
   • Details: Canara Bank announced a blanket waiver of AMB requirements for all savings accounts, including regular, salary, and NRI accounts, effective June 1, 2025. Previously, the bank required an AMB of ₹2,000 in urban branches, ₹1,000 in semi-urban branches, and ₹500 in rural branches. This move, described as a “customer-first” policy, aims to make banking inclusive for students, salaried professionals, and NRIs.

5. Indian Bank

   • Effective Date: July 7, 2025
   • Details: Indian Bank has completely removed the minimum balance requirement across all savings accounts, including regular, salary, and other account types, effective July 7, 2025. This decision is particularly beneficial for students, small businessmen, and rural customers, aligning with the bank’s goal of connecting more people to banking services without the stress of penalties.

6. Bank of India (BoI)

   • Effective Date: July 1, 2025
   • Details: BoI has waived minimum balance penalties for all savings accounts, aligning with the trend among public sector banks to enhance financial inclusion. This waiver applies to standard savings accounts, offering flexibility to customers who maintain low or zero balances.

Private Sector Banks: A Different Approach

While public sector banks have embraced zero-balance policies, major private banks like HDFC Bank, ICICI Bank, and Axis Bank continue to enforce AMB requirements in 2025:

• HDFC Bank: Requires an AMB of ₹10,000 in urban areas, ₹5,000 in semi-urban areas, or a fixed deposit of ₹1 lakh (for urban) or ₹50,000 (for semi-urban) for at least 1 year and 1 day. Penalties for non-compliance can reach up to ₹600. Unconfirmed reports suggest these limits may increase post-April 2025.
• ICICI Bank: Mandates an AMB of ₹10,000 for metro/urban areas and ₹5,000 for semi-urban/rural areas, with penalties up to ₹450 based on the shortfall.
• Axis Bank: Requires an AMB of ₹10,000 for semi-urban/rural branches or a fixed deposit of ₹50,000 for 12 months or more. For Priority Savings Accounts, the AMB is ₹2,00,000 across all locations, with penalties up to ₹600.

Private banks often offer zero-balance accounts for specific categories, such as salary accounts or accounts under the PMJDY scheme, but their standard savings accounts typically retain AMB requirements. Customers are encouraged to explore zero-balance options or link fixed deposits to avoid penalties.

Why Are Banks Waiving Minimum Balance Requirements?

The shift toward zero-balance savings accounts by public sector banks is driven by several factors:

• Financial Inclusion: The Reserve Bank of India (RBI) and the Finance Ministry have emphasized inclusive banking, particularly for rural and low-income customers. Waiving AMB penalties aligns with schemes like PMJDY, which promotes zero-balance accounts for all citizens.
• Declining CASA Deposits: The RBI’s Financial Stability Report (June 30, 2025) noted a decline in Current Account and Savings Account (CASA) deposits, with term deposits gaining prominence. By removing AMB requirements, banks aim to attract and retain customers to boost CASA ratios.
• Customer-Centric Approach: Penalties for low balances have been a pain point, especially for customers with irregular incomes. Banks like SBI, PNB, and Canara Bank have cited customer convenience and trust-building as key motivations.
• Competition and Digital Banking: With the rise of digital-only banks and fintech platforms offering zero-balance accounts, public sector banks are adapting to remain competitive and promote digital transactions.

An RTI revelation highlighted that banks have earned significant revenue (e.g., PNB earned ₹1,538 crore over five years) from minimum balance penalties, underscoring the financial burden on customers and prompting these reforms.

Benefits for Customers

The removal of AMB requirements offers several advantages:

• No Penalties: Customers can maintain low or zero balances without incurring fees, providing financial flexibility.
• Inclusivity: Benefits priority segments like students, senior citizens, women, and rural customers, encouraging more people to engage with formal banking.
• Stress-Free Banking: Eliminates the need to constantly monitor account balances to avoid penalties.
• Support for Digital Transactions: Encourages account usage for digital payments, aligning with India’s push for a cashless economy.

Tips to Navigate Banking in 2025

To make the most of these changes and avoid penalties with banks that still enforce AMB:

• Choose Zero-Balance Accounts: Opt for accounts under PMJDY or zero-balance schemes offered by SBI, PNB, BoB, Canara Bank, or Indian Bank.
• Monitor Bank Updates: Check official bank websites or branches for policy changes, especially for SBI, where unconfirmed reports suggest a possible reintroduction of AMB in April 2025.
• Set Up Alerts: Use mobile banking apps to receive low-balance notifications, particularly for private bank accounts.
• Link Fixed Deposits: For private banks like HDFC, maintaining a fixed deposit can exempt you from AMB requirements.
• Switch Banks if Needed: If your current bank imposes high AMB penalties, consider moving to a public sector bank with a zero-balance policy.

Conclusion

The waiver of minimum balance requirements by major public sector banks like SBI, PNB, Bank of Baroda, Canara Bank, Indian Bank, and Bank of India in 2025 marks a significant step toward inclusive and customer-friendly banking. These changes, effective from dates ranging from 2020 (SBI) to July 7, 2025 (Indian Bank), provide relief to millions of account holders, particularly those in vulnerable segments. However, private banks like HDFC, ICICI, and Axis continue to enforce AMB requirements, urging customers to explore zero-balance options or alternative strategies. As banking evolves, staying informed through official bank channels and leveraging digital tools will help customers maximize benefits and avoid unnecessary fees.

Sources: NDTV, Goodreturns, Economic Times, Moneycontrol, LiveMint, Outlook Money, Free Press Journal, Times Bull
Posted on July 9, 2025