Minimum balance rules for savings accounts in India's private and public sector banks have changed. Private banks like HDFC and ICICI now expect customers to maintain higher minimum balances, while SBI, PNB, Indian Bank, and Canara Bank offer zero-balance facilities. Violations of these rules may result in penalties in private banks.
New Delhi: HDFC and ICICI Bank have revised their Minimum Average Balance (MAB) rules for savings accounts. At ICICI Bank, customers in metro and urban areas now need to maintain an average balance of ₹50,000, while at HDFC Bank, it's ₹25,000. Banks can levy penalties for non-compliance. Meanwhile, government banks like SBI, PNB, Indian Bank, and Canara Bank have removed the minimum balance requirement, allowing customers to operate zero-balance accounts without any penalty. This change is aimed at customer convenience and simpler banking.
Zero Balance Facility in Government Banks
Government banks such as SBI, PNB, and Bank of Baroda have eliminated the minimum balance requirement in their general savings accounts. The State Bank of India had already abolished this rule about five years ago. Subsequently, Canara Bank and Indian Bank completely removed the minimum balance requirement from June and July 2025, respectively.
This means that customers can now maintain a zero balance in their accounts without incurring any penalties. This reduces the additional financial burden on customers, and small investors or new account holders can easily benefit from banking facilities.
This step in government banks is considered part of a customer-centric policy. It not only makes it easier to open an account, but also encourages people to develop regular saving habits.
Situation in Private Banks
Meanwhile, the minimum balance rule still applies in private banks. For example, at Axis Bank, it is necessary to maintain an average balance of ₹12,000 for semi-urban areas. If this amount is not met, the customer may be subject to a penalty of up to 6%, but the maximum penalty is limited to ₹600.
Similarly, at HDFC Bank for urban areas and at ICICI Bank for certain special accounts, maintaining a minimum balance is mandatory. Private banks generally apply this rule to new account holders, while old rules continue to apply to old account holders.
What is Minimum Average Balance (MAB)?
MAB is the stipulated amount that must be maintained in the customer's account every month. If the customer does not maintain this amount, the bank may levy a penalty.
The purpose of MAB is to cover the bank's operating expenses and manage the account smoothly. It depends on the bank and the type of account.
Penalties and Precautions
The penalty amount for not maintaining the minimum balance varies in private banks. For example:
- HDFC Bank: Up to ₹600 in urban areas
- ICICI Bank: Up to ₹50,000 in some accounts
Therefore, when opening a new account, it is essential that customers thoroughly understand the bank's MAB rules. This not only helps in avoiding unnecessary penalties but also makes account management simple and effective.
