In a welcome move for millions of savings account holders, five major Indian banks have eliminated the Average Monthly Balance (AMB) requirement on a wide range of savings accounts, removing penalties for non-compliance. Starting July 2025, customers at these banks will enjoy more freedom and flexibility with their funds without fear of penalty charges.

What is AMB?

Average Monthly Balance (AMB) refers to the minimum average amount a customer must maintain in their savings account every month. Failing to maintain this balance earlier resulted in penalties, which varied depending on the bank and account type. This policy has now changed for many accounts across these five banks:

1. Bank of Baroda

  • Change effective: July 1, 2025

  • Waiver applies to: All standard savings accounts

  • Exclusion: Premium savings accounts still require a minimum balance

  • Impact: No charges for shortfalls in AMB going forward

    • 2. Punjab National Bank (PNB)

    • Waiver applies to: All savings accounts

  • Earlier policy: Penalties were based on the size of the shortfall

  • Impact: Complete removal of non-maintenance charges offers relief to account holders

    • 3. Canara Bank

    • Change announced in: May 2025

  • Waiver applies to: Regular, salary, and NRI savings accounts

  • Impact: Supports a wide customer base including NRIs, salaried employees, and general account holders

    • 4. Indian Bank

    • Waiver applies to: Most standard savings accounts (exact details expected in individual branches)

  • Impact: Removes burden on customers to track monthly balances

    • 5. State Bank of India (SBI)

    • Waiver status: In place since 2020

  • Applies to: All savings accounts

  • Impact: Early mover in removing AMB penalty, now followed by other major public sector banks

    • Why this matters

    The move is being hailed as a customer-friendly initiative that especially benefits:

    • Students

  • Senior citizens

  • Daily wage earners

  • Rural account holders

  • Small depositors

    • Removing the AMB requirement promotes financial inclusion, especially in rural areas where maintaining minimum balances has historically discouraged formal banking.