Canara Bank Removes Minimum Balance Rule for All SB Accounts

In a major move aimed at promoting financial inclusion and customer convenience, Canara Bank has waived the minimum balance requirement across all its savings bank (SB) accounts, including regular savings, salary, and NRI accounts. This decision eliminates Average Monthly Balance (AMB)-related penalties, making Canara Bank the first major public sector bank in India to implement such a customer-friendly reform.

Why in News?

The news is significant as Canara Bank’s recent decision marks a major shift in traditional banking practices, especially for public sector banks. It reflects a growing trend toward inclusive and digital-first banking, enabling easier access for customers from various economic backgrounds, including students, salaried individuals, and rural account holders.

Key Highlights

• Bank: Canara Bank
• Reform: Waiver of AMB (Average Monthly Balance) requirement
• Effective for: All types of SB accounts—Regular, Salary, NRI
• Customer Benefit: No penalties for not maintaining minimum balance

Objectives of the Reform

• Promote financial inclusion
• Encourage banking among low-income and rural populations
• Enhance customer satisfaction by reducing penalty-based banking

Background

• Average Monthly Balance (AMB): Previously, customers had to maintain a certain average balance each month based on the account type and location (urban/rural).
• Penalty Charges: Non-maintenance led to monthly penalties, varying with account categories and zones.

About Canara Bank

• Founded: 1906 by Ammembal Subba Rao Pai in Mangalore
• Branches (as of March 31, 2025): 9,849 across India (3,139 in rural areas)
• ATMs: 9,579
• International Presence: London, New York, Dubai, GIFT City

Significance

• Supports the government’s vision of Jan Dhan Yojana and Digital India
• Benefits students, senior citizens, salaried class, and NRIs who may not maintain high balances
• Reduces barriers to accessing banking services for underserved populations