Over the course of five years, public sector banks have amassed Rs 8,495 crore from customers who failed to maintain the minimum balance in their savings accounts in the form of penalties, according to a Times of India news report.
The State Bank of India (SBI) withdrew these charges a few years, resulting in Punjab National Bank collecting the highest amount of fines, totaling Rs 1,538 crore over the past five years, stated ToI. Indian Bank, Bank of Baroda, and Canara Bank followed, collecting Rs 1,466 crore, Rs 1,251 crore, and Rs 1,158 crore, respectively, according to Times of India.
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What is minimum balance requirement of banks
The minimum balance may vary depending on the savings account and free services offered. Banks inform the minimum balance to be maintained, taking into account the costs associated with keeping and servicing such accounts, as well as levying certain charges if the minimum balance is not maintained.
What is Average Monthly Balance?
The Average Monthly Balance (AMB) is the minimum amount of money that you need to maintain in your savings account to avoid non-maintenance charges.
To calculate your AMB, the bank takes the sum of the closing balances for all days in a month and divides it by the number of days in the month. If the average is less than the AMB, the bank will notify you in 2 months that you maintain the minimum balance to avoid the non-maintenance charges. This charge will be directly deducted from your Savings Account funds.
Here is a comparison of minimum balance charges of big banks such as SBI, HDFC Bank , ICICI Bank, Yes Bank, PNB. (Source: Bank websites; charges as on August 12, 2024.)
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State Bank of India
State Bank of India (SBI) does not charge a penalty for non-maintenance of Average Monthly Balance in savings bank accounts. This has been waived off since 2020.
HDCF Bank
The average monthly balance for metro and urban requirements is Rs 10,000/-, or a fixed deposit of Rs 1 lakh for a minimum of one year and one day. For semi urban is Rs 5,000/- or FD of Rs 50,000 for minimum 1 year 1 day period . The charge for the above is 6% of the shortfall from the average balance requirement OR Rs 600 whichever is lower.
ICICI Bank
Minimum monthly average balance (MAB) is Rs. 5000 and charges for non-maintenance of Minimum MAB is Rs. 100 + 5% of the shortfall in required MAB.
PNB
The minimum balance requirement and charges for not maintaining minimum balance in the account is Rs.400 for rural, Rs.500 for semi urban and Rs.600 urban/metro
Yes Bank
If Balance maintained is less than or equal to 100% of the requirement- NIL charges
2. If it is more than 50% of the requirement- 5% of balance shortfall
3. If the balance is less or equal to 50% of the requirement – 10% of balance shortfall, 5% of balance shortfall for Savings Value
