In a major relief for millions of bank customers, Canara Bank, one of India’s leading public sector banks, has taken a customer-friendly decision that will change the way people manage their savings accounts. The bank has officially removed the requirement to maintain a minimum balance in savings accounts. This step is seen as a progressive move to make banking more accessible and stress-free for everyone.
What Does This Decision Mean?
Until now, savings account holders were required to maintain a Minimum Average Monthly Balance (MAB). If they failed to do so, they were charged a penalty or service fee. These rules applied differently based on the location of the branch:
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₹2000 in metro cities
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₹1000 in semi-urban areas
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₹500 in rural areas
Customers who couldn’t maintain this balance were penalized every month, which added to their financial burden, especially for the low-income group and rural customers.
But starting June 1, 2025, Canara Bank has completely removed this condition. This means customers can now operate their savings account with zero balance and won’t have to pay any penalty for not maintaining a minimum amount.
Accounts Covered Under the New Rule
This decision is not limited to just one type of account. The following account types are now eligible for zero balance operation:
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Savings Accounts
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Salary Accounts
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NRI Savings Accounts
With this, Canara Bank has become the first major public sector bank in India to offer this benefit across all its savings account types.
How Does This Benefit Customers?
Here are some key advantages of this move for customers:
1. No More Penalty Worries
Previously, not maintaining a balance would result in monthly penalties. That concern is now gone.
2. Flexibility to Manage Funds
People can now freely use their money for urgent needs without worrying about keeping a set amount untouched in their account.
3. Boost for Rural and Low-Income Users
For those who live paycheck to paycheck, this decision is extremely helpful. It gives them full access to every rupee they earn.
4. Encouragement to Join the Banking System
This move promotes financial inclusion, especially among those who previously avoided opening bank accounts due to fear of penalties.
Comparison With Other Banks
Most banks in India, including both public and private ones, still enforce minimum balance rules. For example:
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SBI: ₹1000–₹3000 depending on the branch type
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HDFC Bank: ₹10,000 in urban branches
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ICICI Bank: ₹10,000 in some accounts
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Axis Bank: ₹5000–₹10,000
Failure to meet these conditions usually leads to monthly penalties. In contrast, Canara Bank’s zero balance policy is a breath of fresh air and sets a new standard in the Indian banking sector.
Impact on the Bank
While the bank may lose some revenue from the penalty charges, the move could prove beneficial in other ways:
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Stronger customer loyalty
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Increased number of account holders
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Improved brand image as a customer-first bank
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Better customer engagement in digital banking
This shows Canara Bank is looking beyond short-term profits and focusing on long-term relationships with its customers.
Things to Keep in Mind
Though the minimum balance condition is removed, customers should note that:
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Other charges like ATM usage beyond free limit, cheque book fees, or SMS alerts, may still apply.
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The rule change is effective from June 1, 2025.
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The new zero-balance benefit applies to all new and existing savings account holders.
Why This Decision Matters for India
India has made significant progress in bringing people into the formal banking system, especially after the Jan Dhan Yojana. Still, many people hesitate to use their bank accounts actively due to fees and minimum balance conditions.
Canara Bank’s decision:
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Supports the government’s goal of financial inclusion
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Encourages the habit of saving and transacting through banks
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Gives freedom to students, senior citizens, daily wage earners, and others with irregular income
Customer Reactions
Customers across the country have welcomed this move. Many feel that this is a step towards fair and inclusive banking.
Ravi Kumar, a shopkeeper from Lucknow, says,
"Earlier, I used to keep ₹2000 just to avoid penalty. Now I can use that amount for stock purchases. It’s a big relief!"
Neha Verma, a student in Delhi, shares,
"As a student, maintaining ₹2000 was hard. With this rule gone, I can freely use my account without worrying."
Conclusion: A Customer-Centric Move That Deserves Applause
Canara Bank has taken a bold and positive step by eliminating the minimum balance requirement across all savings accounts. In a time when most banks still focus on fees and conditions, Canara Bank has put customers first.
This decision not only benefits existing customers but also encourages more people to trust the formal banking system. As India moves towards a cashless and inclusive economy, such policies are critical.
If you are not a Canara Bank customer yet, this could be the right time to open a savings account and enjoy hassle-free banking.
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