Big Banking Relief by Indian Bank: No Charges on Zero Balance Accounts from July 7

Big Banking Relief by Indian Bank: In a significant move aimed at boosting financial inclusion and easing the burden on customers, Indian Bank, one of India’s leading public sector banks, has announced a major relief for its account holders. Starting July 7, 2025, the bank will completely eliminate the minimum balance requirement for all savings accounts. This means customers will no longer be required to maintain a specified minimum balance, and no penalties or charges will be levied even if the balance falls below the earlier threshold.

This move is expected to benefit millions, especially those with limited monthly incomes, such as rural residents, students, senior citizens, and small traders. Indian Bank stated that this decision will make banking easier, more accessible, and affordable for all, encouraging greater participation in the formal banking system.

What is Minimum Average Balance (MAB)?

Minimum Average Balance (MAB) refers to the average amount customers are required to maintain in their account each month. Failure to do so usually attracts penalties or service charges. With this new policy, Indian Bank has completely done away with these penalties, offering full flexibility to its account holders.

Other Banks Have Taken Similar Steps

Prior to Indian Bank’s announcement, other major public sector banks had already moved in this direction.

Canara Bank removed the Average Monthly Balance (AMB) requirement across all accounts.

Punjab National Bank (PNB), from July 1, 2025, eliminated all charges for non-maintenance of MAB across its savings accounts.

Why This Decision Matters

Maintaining a minimum balance often becomes difficult for certain sections of society—particularly rural populations, students, and micro-entrepreneurs. With this change, such individuals will now be able to operate their accounts without worry, and access full banking services without any financial strain.

Relief for Loan Customers as Well

Indian Bank has also extended benefits to its loan customers. The bank has reduced its one-year Marginal Cost of Funds-based Lending Rate (MCLR) by 0.05%, bringing it down to 9.00%, effective July 3, 2025. This will lead to lower interest rates on loans and reduced EMIs for borrowers.

A Step Toward Expanding Banking Access

This strategic move is expected to expand the banking sector’s reach, drawing more people into the formal financial system and promoting the habit of savings. By removing fear of penalties, the bank enables users to utilize its services more freely—an important step toward strengthening India’s economic foundation.

Indian Bank’s decision to eliminate minimum balance charges marks a significant step toward inclusive banking. It not only provides financial relief to existing customers but also encourages new users—especially from rural and semi-urban areas—to open and use bank accounts without hesitation. This initiative is expected to boost both digital and physical banking, and contribute to the broader goal of financial empowerment in India.