Canara Bank has announced the complete waiver of the average monthly balance requirement across all its savings bank accounts, effective June 1, the lender said in an exchange filing.
The move step positions Canara Bank as the leading public sector bank in India to eliminate penalties for non-maintenance of minimum balances across a wide spectrum of savings accounts, including salary accounts, NRI savings bank accounts, and more.
Previously, Canara Bank customers were required to maintain a minimum average monthly balance of Rs 2,000 in urban region and Rs 500 in the rural, with penalties imposed for non-compliance. With this new policy, no savings bank customer—whether salaried individuals, senior citizens, students, NRIs, or first-time banking users—will face any charges or penalties for failing to maintain a minimum balance.
This initiative is expected to benefit millions, removing a longstanding barrier for those who found it challenging to keep up with minimum balance requirements. The move is particularly relevant for students, pensioners, and low-income account holders, for whom such penalties often pose a financial burden.
The banking sector in India has witnessed increasing competition, with digital-first banks and fintech companies offering zero-balance accounts and hassle-free banking.
By waiving the average monthly balance requirement, Canara Bank will likely attract new customers, especially those previously hesitant to open or maintain bank accounts due to fear of penalties.
Additionally, this move has come at a time when several banks have started cutting savings rates of interest in order to align with the easing interest rate cycle.
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