NEWS
Public sector banks may remove minimum balance fines
Public sector banks are in discussions with finance ministry to scrap requirement of customers maintaining minimum balance in savings deposit accounts; five banks already dropped this.
Public sector banks are in discussions with finance ministry to scrap requirement of customers maintaining minimum balance in savings deposit accounts; five banks already dropped this.
Public Sector Banks (PSBs) may decide to scrap the requirement of customers maintaining a minimum balance in their savings deposit accounts.
The pressure has come from the falling share of low-cost CASA (current account savings account) deposits in the banks.
At least five PSBs have dropped this requirement. Customers in Punjab National Bank, Bank of Baroda, Canara Bank, Indian Bank and State Bank of India (in 2020) do not have to pay a penalty if they fail to maintain the minimum prescribed balance in their savings accounts.
The PSBs are in discussions with the Ministry of Finance to do away with the practice of making customers maintain a minimum balance in savings deposit accounts.
The finance ministry is concerned about the slowdown in the CASA deposits of the banks. In this backdrop, the ministry officials have reportedly questioned the rationale of the PSBs penalising customers who do not maintain a minimum balance in their savings accounts.
The Reserve Bank of India (RBI), in its financial stability report released on 30 June 2025, said that "banks' liability profile is changing with the share of higher-cost term deposits and CDs growing compared to low-cost CASA deposits".
