If you have a bank account in Punjab National Bank (PNB), then there is some very good news for you. Giving a big relief to its customers, the bank has announced that now there will be no penalty for not maintaining the minimum average balance in the savings account. This decision of PNB is a big relief for lakhs of customers who were always worried about maintaining the minimum balance in the account. This new rule has come into effect from July 1, 2025.
Why was the minimum balance rule removed
The bank has described this move as an important step towards promoting financial inclusion and making banking services accessible to all. This new rule will especially help women, farmers, and low-income families, who often face trouble due to not being able to maintain the minimum balance. This news has also brought a wave of happiness among the PNB customers of Phulbaria. Before PNB, Canara Bank had also removed the condition of maintaining an average monthly balance (AMB) from all its accounts from June 2025.
Why do banks impose a minimum balance rule
Banks ask to maintain a minimum balance in their accounts so that their operational expenses can be met. This cost includes many services like online banking, ATM, and a branch. Many times, banks also provide facilities like higher interest rates or free ATM transactions to customers who maintain a minimum balance.
When customers do not maintain a minimum balance, the bank imposes a penalty on them. Sometimes banks also close the account for not maintaining a minimum balance for a long time. In short, banks run on a business model and depend on deposits and penalties to meet their costs.
RBI rules and banks’ earnings
According to the rules of the Reserve Bank of India (RBI), banks always have to ensure that the account does not go into negative due to the penalty for not maintaining the minimum balance. Banks also meet their operational costs in many other ways, such as:
- SMS alert fees
- Service fees
- Transaction fees
- Interest earnings
Many times, banks remove the minimum balance rules to make banking services accessible to remote rural areas and low-income people. This is a huge benefit for the customers.