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Economic Times
06-07-2025
- Business
- Economic Times
Bank of Baroda also waives minimum balance charges amid deposits chase
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 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.
Time of India
06-07-2025
- Business
- Time of India
Bank of Baroda also waives minimum balance charges amid deposits chase
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel 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 this, the bank joined Canara Bank 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 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 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.
Economic Times
06-06-2025
- Business
- Economic Times
In a challenge to peers, Canara Bank waives minimum balance rule
Canara Bank has scrapped the average monthly balance (AMB) requirement across all savings bank accounts in a bid to shore up deposits – an industry-wide challenge amid falling interest rates and growing competition from capital markets. India's fourth-largest public sector bank by assets expects to lose 'a few hundred crores' per year in penalty income due to the move but it hopes the move will encourage customers to shift funds into term or recurring deposits in the long term, executive director S K Majumdar said. 'Perhaps if we don't do this, we will lose deposits,' Majumdar told ET. '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. The waiver, with effect from June 1, is across all savings accounts including salary accounts and NRI accounts. Minimum balance requirements in Canara Bank's savings bank accounts ranged from an average monthly balance of Rs 500 in rural branches to an average quarterly balance of Rs 1 lakh for their savings bank power plus accounts. Failure to maintain these balances resulted in penalties ranging from Rs 25 per month to Rs 60 per day excluding GST, information on the bank's website showed. 'We will lose a few hundred crores by waving these charges, but we hope to recoup these losses through increase in other deposits," Majumdar said. 'We expect others to do it as well as banks need to find ways to garner deposits.' He said the ease with which customers can shift funds to recurring or term deposits from SB accounts due to digital banking could mean that the bank may get inflows into those fixed term Bank's annual presentation shows that the annual service charge fees it collected increased 4% year on year to Rs 3,561 crore in the fiscal ended March 2025 from Rs 3,417 crore a year earlier. The bank does not give a separate number for charges on non-maintenance of balances.
