Big Relief for Bank Customers on keeping minimum bank balance

There is a big relief for all those people who often worry about keeping a minimum balance in their bank accounts every month. Many large government banks in India is seriously giving a thought about ending the rule which requires customers to maintain a minimum balance. Some major banks like Canara Bank, Bank of Baroda, Punjab National Bank, and Indian Bank has already taken steps in this direction and removed the policy of minimum balance requirement.

This topic took place in a recent meeting between the Finance Ministry and banks. The ministry questioned about customers being forced to maintain a minimum balance when most banking services have become digital now. The reason behind this step is to reduce the burden on customers and make banking more friendly and accessible.

A recent report by the Reserve Bank of India showed more power to this idea. The Financial Stability Report showed that banks are opting more on high-interest sources like fixed deposits and commercial papers. While on the other hand, savings and current account deposits are going down because of this change, banks are giving a thought over the minimum balance rules.

Also, the Jan Dhan Yojana has also played an important role in changing how banks look at this rule. At first, the accounts of Jan Dhan were inactive but with time, people started using them on daily basis. This proved that even without asking for a minimum balance, bank accounts can stay active and useful.

State Bank of India, which is India’s largest bank had already removed the minimum balance rule back in March 2020. This decision came after it was found that the bank earned more from penalties than profit which resulted in criticism. So after that, SBI customers need not worry about keeping a certain amount in their savings accounts.

However, private banks are still very strict when it comes to this condition. If the balance goes below the required amount then they continue to charge penalties. Some exceptions are made for people who have Jan Dhan accounts, salary accounts, or fixed deposits.

Minimum balance means the amount of money which a person must keep in their bank account at all times. And if the balance goes below this limit then the bank can charge a fee as a penalty. Private banks continue to follow this rules strictly while public sector banks are slowly moving towards a more relaxed approach.

This new update is a hope for many bank customers who find it difficult to maintain a fixed amount every month. If more banks decide to drop the minimum balance rule then it could make banking easier and more inclusive for everyone.