logo
Bank of Baroda also waives minimum balance charges amid deposits chase

Bank of Baroda also waives minimum balance charges amid deposits chase

Economic Times19 hours ago
Mumbai: State-owned Bank of Baroda on Sunday announced waiver of charges to customers for not maintaining minimum balance in their savings accounts. This has come into effect from July 1.
With this, the bank joined Canara Bank, State Bank of India, Punjab National Bank, and Indian Bank in waiving the minimum balance requirement. "With this, customers will not incur any charges for any shortfall in the Monthly Average Balance in their Savings Accounts. The waiver is not applicable on Premium Savings Account schemes," Bank of Baroda said in a statement.
Experts suggest the move is likely to be part of lenders' strategy to attract liabilities as deposit growth remains a challenge for the banking industry. "Waiving penal charges on non-maintenance of minimum balance is an indirect message from banks to customers to keep some money with them," said Saurabh Bhalerao Associate Director - BFSI Research, CARE Ratings. "Bank deposit is no longer the go-to option for people to save their money. People are now increasingly putting money in other financial products like mutual funds and even direct investment into stocks. With falling rates on deposits, banks may not find it easy to grow their deposit book. Share of CASA (current and savings account) has come down," he added.Canara Bank, which was the first bank to announce waiver of charges, hoped that the move will encourage customers to shift funds into term or recurring deposits in the long term. "Perhaps if we don't do this, we will lose deposits," bank's executive director S K Majumdar told ET last month.
"This creates a feel good for the customer. At a time when the industry is facing a challenge of mobilising deposits, especially because capital markets are doing well, this gives customers an alternative," he added.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

No penalty on minimum balance: 5 banks that have removed savings accounts balance requirement
No penalty on minimum balance: 5 banks that have removed savings accounts balance requirement

Time of India

time3 hours ago

  • Time of India

No penalty on minimum balance: 5 banks that have removed savings accounts balance requirement

Average Monthly Balance (AMB) Bank of Baroda Academy Empower your mind, elevate your skills Bank of Baroda savings account interest rate Present SB Interest Rate Slab on O/s Balance Interest Rates upto Rs. 1.00 Lakh 2.50% Above Rs 1.00 Lakh to less than Rs. 50 Lakh 2.50% Rs. 50 Lakh and less than Rs. 10 Crores 2.50% Rs. 10 Crores and above to less than Rs. 50 Crores 2.50% Rs. 50 Crores and above to less than Rs. 100 Crores 2.75% Rs. 100 Crores and above to less than Rs. 200 Crores 2.75% Rs. 200 Crores and above to less than Rs. 500 Crores 2.75% Rs. 500 Crores and above to less than Rs. 1,000 Crores 3.50% Rs. 1,000 Crores and above to less than Rs. 2,000 Crores 4.00% Rs. 2,000 Crores and above 4.25% You Might Also Like: Canara bank revises FD, savings interest rate: Check latest rates Canara Bank savings account interest rates Slabs ROI(%) 1 For outstanding Balance of less than Rs. 50 Lakh 2.55% 2 For outstanding Balance of Rs. 50 Lakh to less than Rs 5 Cr 2.55% 3 For outstanding Balance of Rs. 5 Cr to less than Rs 10 Cr 2.55% 4 For outstanding Balance of Rs. 10 Cr to less than Rs 100 Cr 2.55% 5 For outstanding Balance of Rs. 100 Cr to less than Rs 200 Cr 2.65% 6 For outstanding Balance of Rs. 200 Cr to less than Rs 300 Cr 2.65% 7 For outstanding Balance of Rs. 300 Cr to less than Rs 500 Cr 3.10% 8 For outstanding Balance of Rs. 500 Cr to less than Rs 1000 Cr 3.40% 9 For outstanding Balance of Rs. 1000 Cr & less than Rs. 2000 Cr 3.55% 10 For outstanding Balance of Rs. 2000 Cr & above 4.00% PNB PNB savings account interest rates Saving Deposit Interest Rate Revised w.e.f. 01.07.2025 Saving Fund Account Balance below Rs.10 Lakh 2.50% p.a. Saving Fund Account Balance of Rs.10 Lakh to less than Rs.100 Crore 2.50% p.a. Saving Fund Account Balance of Rs.100 Crore & above 2.70% p.a. These bank customers need not worry about maintaining minimum balance in a savings account. Recently, some of the major publicly listed banks in India have removed the compulsory practice of keeping an Average Monthly Balance (AMB) thus removing all penalties for underperformance. PNB and other banks such as Bank of Baroda Canara Bank , have removed the minimal balance criteria on the majority and in some cases all of their savings average monthly balance (AMB) is the minimum balance that a customer is required to maintain in his/her bank account. If the balance in the bank account falls below the required amount, then banks levy a penalty for failing to maintain the AMB. The penalty varies based on the type of savings of Baroda has announced an initiative by waiving charges on non-maintenance of minimum balance in all standard Savings Accounts, with effect from July 1, 2025. With this, customers will not incur any charges for any shortfall in the monthly average balance in their Savings Accounts. Note that the waiver is not applicable on Premium Savings Account Bank said that it will waive off minimum balance criteria and it has announced the complete waiver of minimum balance charges across all savings bank accounts. This will be effective from July 7, May 2025, Canara Bank also announced a waiver of the average monthly balance requirement for all types of savings bank accounts, including regular savings accounts, salary accounts, and NRI savings National Bank (PNB) will also no longer charge penalties for failing to maintain the minimum average balance (MAB) in all savings PNB, charges for the non-maintenance of MAB were previously directly proportional to the extent of the shortfall, which means the penalty was calculated as a percentage of the shortfall from the required minimum Savings account interest ratesSBI has waived off the requirement for maintaining a minimum balance in all savings accounts since 2020; there is no penalty if the minimum balance in the savings account is not maintained.

Can RBI Governor's Tie Colour Predict India's Fiscal Policy? SBI Report Says...
Can RBI Governor's Tie Colour Predict India's Fiscal Policy? SBI Report Says...

NDTV

time4 hours ago

  • NDTV

Can RBI Governor's Tie Colour Predict India's Fiscal Policy? SBI Report Says...

Economists across the globe have to crunch numbers to predict the policy decisions by central banking institutions, but new research by the State Bank of India (SBI) suggests that there might be a simple methodology, especially in the Indian context. The colour of the necktie worn by the Reserve Bank of India (RBI) governor could hint at the upcoming monetary policy decisions. The report posits that in an alternate universe, the monetary policy doesn't just follow inflation or GDP, it follows the governor's wardrobe. "When repo decisions are made, it's not just models and mandates that matter, but the shade of silk around the RBI Governor's neck," reads the lighthearted report under the section, Necktie Nomics: When Fashion Meets Fiscal Signals. The report draws on psychological theory and past policy announcements to examine whether there could be a pattern between necktie tones and interest rate actions. It breaks down the tie colours worn by the RBI governor into four tone categories: Warm: Red, peach, orange, coral Cool: Blue, aqua, light blue, royal blue Dark: Black, dark blue, black with silver Mixed: Purple, yellow While the warm neckties are tied to hawkish policies, leading to rate hikes, the dark tones suggest more decisiveness. "In the uncertainties besieged world, Dark looks more associated with decisiveness as it clearly happened in the recent jumbo rate cut of 50 bps," the report highlighted. As for cool tones, the monetary policies remain unchanged, while mixed colour neckties were deemed the least predictable, with the highest variation in outcomes. Tie Volatility Index The report then introduces the Tie Volatility and Tilt Index (TVTI) -- a metric blending a tone's average policy direction with how consistently it points that way. The report acknowledges its own light-hearted nature, noting that these findings should be "taken with a pinch of sugar". It adds that when certain words like "growth" start appearing in the governor's speeches, instead of "inflation", it hints towards a real shift in the central bank's priorities, translating into action.

Public sector banks likely to remove minimum balance fines
Public sector banks likely to remove minimum balance fines

Time of India

time6 hours ago

  • Time of India

Public sector banks likely to remove minimum balance fines

Public sector banks are reconsidering the need for customers to maintain minimum balances in savings accounts, following discussions with the finance ministry over the declining share of current and savings accounts in total deposits, as per a TOI report. Canara Bank , Bank of Baroda , Punjab National Bank and Indian Bank have recently dropped this requirement, which means that customers who fail to maintain the minimum prescribed balance will not have to pay a penalty. In a recent meeting, finance ministry officials are understood to have questioned banks on the need to penalise customers who do not maintain minimum balance, the TOI report says.. The concern stemmed from the slowdown in low-cost current and savings account deposits. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 이렇게 생겼는데 말소리도 또렷이 들려주는 보청기, 무료로 체험 가능 히어닷컴 Undo RBI in its financial stability report noted that "banks' liability profile is changing with the share of higher-cost term deposits and CDs growing compared to low-cost current account and savings account (Casa) deposits" According to bankers, Jan Dhan data suggests that while many of these accounts were initially dormant, balances rose steadily. This experience appears to have influenced the policy shift. Live Events State Bank of India ( SBI ) became the first lender to scrap minimum balance requirements in 2020, after facing public backlash when an RTI disclosure showed that charges collected for non-maintenance of balances had surpassed its net profit—largely absorbed by provisions for bad loans. Traditionally, public sector banks had lower balance requirements compared to private banks with the requirement waived for Jan Dhan accounts. Besides the mandatory exclusion of Jan Dhan accounts , private banks also waive minimum balance requirements on salary accounts and on those accounts where the customers maintain a threshold in terms of 'relationship value' which includes fixed deposits and other investments. Historically, banks have been using returns generated from low-interest savings accounts to cross-subsidise banking services which were provided free of charge. However, incremental costs for banks have reduced as most banking services are now provided through digital channels. The new approach is to recover the costs of maintaining accounts through other means - such as debit card fees and charges for transactions beyond free limits. (With TOI inputs)

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store