No More Minimum Balance Hassle: 8 Banks That Won’t Penalize You

Millions of savings account holders in India have a reason to cheer. The long-standing pressure of maintaining a minimum balance is finally easing. Eight major public sector banks have now removed this requirement, meaning account holders can keep any amount or even zero without facing penalties. This is a significant step toward more customer-friendly banking.

What Is a Minimum Balance?

A minimum balance is the amount banks require customers to maintain in their savings accounts. This threshold varies from bank to bank, and failing to meet it usually results in penalties. With this change, millions of Indians no longer have to worry about unnecessary fees, giving them greater flexibility in managing their finances.

Banks That Have Removed the Rule

So far, the banks that have done away with the minimum balance requirement for savings accounts are: State Bank of India (SBI), Union Bank of India, Bank of Baroda, Indian Bank, Canara Bank, Punjab National Bank (PNB), Bank of India, and most recently, Indian Overseas Bank (IOB).

Here’s a closer look at the banks leading this change:

Indian Overseas Bank (IOB) - The latest addition, effective October 1, 2025, applies to SB-Public accounts. Premium accounts like HNI, Prime, and Privilege are excluded.

State Bank of India (SBI) - The country’s largest bank was one of the first to make this shift in 2020, relieving millions of account holders from minimum balance worries.

Bank of Baroda - From July 1, 2025, the minimum balance rule was waived for all standard savings accounts, though premium savings plans are excluded.

Indian Bank - Effective July 7, 2025, all savings accounts no longer attract penalties for low balances.

Canara Bank - In May 2025, the bank announced that the minimum balance rule would no longer apply to any of its accounts, including regular, salary, and NRI accounts.

Punjab National Bank (PNB) - Waived penalties for non-maintenance of balance across all savings accounts.

Bank of India - Cited customer welfare and evolving financial trends as reasons to remove the minimum balance requirement.

Union Bank of India - Effective from the September 2025 quarter, all general savings accounts are exempted from the minimum balance rule.

Key Points to Remember

• Even with a zero balance, accounts cannot go negative. The Reserve Bank of India (RBI) ensures that banks do not allow automatic overdrafts.
• Premium accounts often have separate rules, so this change primarily benefits standard savings account holders.

Why This Change Matters

Removing the minimum balance requirement is a major relief for many, especially for students, low-income groups, and first-time bank users. It reduces the financial burden and makes banking more inclusive. This move also reflects a shift in the banking sector toward customer-centric policies and greater financial flexibility.

As more banks consider following this path, Indian banking is set to become simpler, more accessible, and less intimidating for millions of people. The focus is now on easing customer experience while promoting financial inclusion across all sections of society.

Disclaimer: The information provided in this article is based on the latest available updates from the respective banks and public sources as of 2025. Banking policies may change over time, and it is recommended to check with the respective bank for the most current details before making any financial decisions. This article is for informational purposes only and does not constitute financial advice.