Canara Bank removes minimum average monthly balance penalty for select accounts from June 1, 2025. Here’s who benefits and what it means for customers.
Canara Bank Scraps Minimum Balance Penalty: Big Relief from June 1
Canara Bank, one of India’s leading public sector banks, has announced a major customer-centric decision. Starting June 1, 2025, the bank will eliminate the penalty for not maintaining the Minimum Average Monthly Balance (MAB) for certain savings accounts.
The move comes in line with efforts to promote financial inclusion, ease of banking, and reduce customer burden, especially for those with basic or small savings accounts.
🔍 Why This Change Matters to Canara Bank Customers
For years, Indian banks have imposed penalties on customers who failed to maintain a specified minimum average monthly balance. This often became a concern for low-income account holders and senior citizens, who may not have frequent transactions.
With this announcement, Canara Bank has aligned itself with customer expectations and inclusivity goals set by RBI. The policy will make savings accounts more accessible and user-friendly, encouraging more people to keep their funds in formal banking channels.
📅 From When Will the Penalty Be Scrapped?
- Effective Date: June 1, 2025
- Applicable Accounts: Select savings accounts (listed below)
💼 Which Canara Bank Accounts Are Exempt from MAB Penalty?
According to the official Canara Bank notification, the penalty waiver applies to the following account types:
✅ Accounts with No MAB Requirement from June 1:
- Basic Savings Bank Deposit Accounts (BSBDA)
- Canara Small Savings Accounts
- Pensioner Accounts
- Accounts under PMJDY (Pradhan Mantri Jan Dhan Yojana)
- Student Savings Accounts
Note: For regular savings accounts, MAB requirements still apply unless further notified by the bank.
📊 Data: Minimum Balance Penalties – Before vs. After
| Account Type | Previous MAB Penalty | Now (Post-June 1) |
|---|---|---|
| BSBDA | ₹0 | ₹0 |
| Jan Dhan Account | ₹0 | ₹0 |
| Regular Account | ₹50–₹250 (depending on branch type) | Still applicable unless further updated |
Source: Canara Bank Official Website
🌐 Why Is Canara Bank Doing This Now?
1. Aligning with RBI’s Financial Inclusion Drive
The Reserve Bank of India has been pushing for simplified and low-cost banking services. This step is aligned with RBI’s broader banking-for-all initiative.
2. Reducing Customer Grievances
Banks often receive customer complaints regarding automatic debits of penalty charges. Removing MAB penalties will reduce such negative customer experiences.
3. Competitive Banking Environment
Private and PSU banks are now offering zero-balance savings accounts to attract new customers. Canara Bank’s latest move helps it stay competitive in this changing landscape.
📌 How Will It Affect Existing Customers?
✔ Benefits for Customers:
- No more surprise deductions for MAB non-compliance
- Easier for students, pensioners, and rural account holders
- Boosts financial discipline without added costs
- Promotes banking activity among previously inactive customers
✖ What Customers Still Need to Know:
- Regular savings accounts will still require MAB compliance
- Any change in account type must be officially requested
- Always check with your branch or use Canara Bank NetBanking to know your account type
🧭 How to Check If Your Account Qualifies
To know whether your account is eligible for the MAB penalty waiver:
🔎 Steps:
- Log in to Canara NetBanking or use Canara AI1 Mobile App
- Navigate to “Account Services” > “Account Summary”
- Look for your Account Type
- If it mentions BSBDA, PMJDY, Pensioner, or Student, you’re eligible
You can also visit your nearest Canara Bank branch for clarification.
🗣️ What Bank Officials Are Saying
“This change is aimed at promoting inclusive banking. We want to ensure that customers, especially in rural and semi-urban areas, do not feel penalized for limited account activity,”
— Official Spokesperson, Canara Bank
📈 Industry Reaction: A Positive Step
Experts believe this decision will put Canara Bank in a favorable light compared to peers that still charge MAB penalties. It may encourage other PSU banks to adopt customer-friendly policies.
Read also: How UPI is Changing the Indian Economy in 2025
❓ FAQs: Canara Bank Minimum Balance Penalty Update
1. What is the new Canara Bank minimum balance rule in 2025?
From June 1, 2025, Canara Bank will not charge penalties on the minimum average monthly balance for select savings accounts like BSBDA, Jan Dhan, and pensioner accounts.
2. Does this apply to all Canara Bank savings accounts?
No. Only specific account types are exempted. Regular savings accounts must still maintain MAB unless stated otherwise.
3. What is the minimum balance required for a regular Canara Bank savings account?
It varies from ₹500 to ₹1,000 based on location (urban/rural) and account type.
4. How can I convert my savings account to zero balance?
Visit your nearest branch or apply through Canara NetBanking to switch to a Basic Savings or Jan Dhan account.
5. Will the penalty be refunded for previous months?
No. The waiver is applicable only from June 1, 2025, onwards.
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If you’re a Canara Bank customer, how does this update affect you?
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