Public sector Canara Bank has given a big gift to its customers from 1 June 2025. The bank has announced to completely eliminate the requirement of Average Monthly Balance (AMB) in all types of savings accounts. This means that now even if the amount deposited in a bank’s savings account is less than the minimum balance, no penalty will be imposed on the account holder.

Savings accounts i.e. savings accounts, salary accounts, NRI savings accounts, etc. will all come under the purview of this exemption. The bank said in a statement that this order has become effective from June 1, 2025. This is a big relief for crores of Indians.

How much penalty was charged earlier

Earlier, Canara Bank customers had to maintain a minimum average monthly balance depending on the type of their account. Failure to do so would attract a penalty. Now the new policy will directly benefit millions of customers.

Earlier penalty

In savings accounts in urban branches: had to maintain a minimum monthly balance of ₹2,000.

In semi-urban branches:- A minimum monthly balance of ₹1,000 was mandatory.

In rural branches:- A minimum monthly balance of ₹500 is to be maintained.

This new policy is expected to bring huge benefits to millions of Canara Bank customers including ‘salaried’ employees, ‘senior citizens’, ‘students’, ‘non-resident Indians (NRIs), and ‘first-time’ users of ‘banking services’. This is a strong initiative towards financial inclusion.

Canara Bank is the country’s first large public-sector bank

Canara Bank is the country’s first large public sector bank that has offered the facility of not imposing any penalty for not maintaining a minimum balance. This is a significant change in the banking industry, which shows a customer-centric approach. Canara Bank offers interest rates on domestic/NRO/NRE savings accounts ranging from 2.70 percent per annum to 4 percent per annum. It is an excellent combination of customer convenience and attractive returns.

How will the removal of the minimum balance affect you

The elimination of the minimum balance requirement will bring many big benefits to Canara Bank customers:

The biggest advantage is that you no longer have to worry about maintaining a minimum balance in your account, and there will be no penalty for it.

You can manage your money with more flexibility, without the fear of any additional charges.

This will be especially beneficial for people who are low-income earners or who do not have a large amount to save.

This is a big relief for students and senior citizens who often find it difficult to maintain the minimum balance.

This will encourage people to join the banking system who earlier hesitated due to minimum balance requirements.

This ‘change’ will truly promote ‘financial inclusion’ and provide ‘easy’ access to ‘modern’ banking services to ‘millions’ of Indians.