Indian Banks’ Minimum Balance Rules in 2025 – Everything You Need to Know

Struggling to keep up with changing minimum balance requirements at Indian banks? This guide breaks down the new 2025 rules for account holders looking to avoid unnecessary fees. We’ll cover ICICI Bank’s upcoming changes, compare minimum balance requirements across major Indian banks, and share practical tips to avoid penalty charges. Whether you’re a student, working professional, or senior citizen, understanding these updated policies will help you manage your accounts more effectively.

Understanding Minimum Balance Requirements

Bank	Minimum Balance Requirement	Zero-Balance Account Availability
State Bank of India	All regular savings accounts are zero-balance accounts	Yes
HDFC Bank	Rural: ₹2,500; Semi-Urban: ₹5,000; Urban: ₹10,000	Limited
ICICI Bank	Metro/Urban: ₹50,000; Semi-Urban: ₹25,000; Rural: ₹25,000	Limited
Axis Bank	Rural: ₹2,500; Semi-Urban: ₹5,000; Urban: ₹12,000	Limited
Bank of Baroda	Rural: ₹500; Semi-Urban: ₹1,000; Urban: ₹2,000	Limited
Bank of India	General: No daily minimum; AQB: ₹500 (Normal), higher for variants up to ₹10 lakh	Limited, some variants
IDFC First Bank	₹10,000 or ₹25,000, depending on account type	Limited
Kotak Mahindra Bank	Sankalp: ₹2,500; Nova: ₹5,000; Edge/Classic: ₹10,000; Pro: ₹20,000; Ace: ₹50,000	Yes, select accounts
RBL Bank	Digital/Senior’s First: ₹5,000; Prime Edge/Woman’s First: ₹10,000; Rise: ₹50,000	Yes, select accounts
Bandhan Bank	Standard: ₹5,000; Sanchay: ₹2,000; BSBDA/PMJDY: ₹0	Yes, BSBDA/PMJDY
Central Bank of India	Metro/Urban: ₹2,000; Semi-Urban: ₹1,000; Rural: ₹500	Limited, BSBDA available

Indian Banks’ Minimum Balance Rules in 2025

What minimum average balance (MAB) means for your savings account

Average Monthly Balance (AMB) is the average balance customers must maintain in their savings accounts throughout a calendar month. Banks calculate this at month-end, and failing to maintain the required MAB typically results in penalties. The penalty amount varies depending on your account type.

How bank location affects your minimum balance requirements

Several major banks have recently removed minimum balance requirements. Since July 2025, Bank of Baroda, Canara Bank, Indian Bank, and Punjab National Bank have waived AMB charges on standard savings accounts. Bank location impacts requirements as these policies may vary between urban, semi-urban, and rural branches.

Why banks impose minimum balance rules

Banks traditionally imposed minimum balance requirements to ensure operational sustainability and fund management. However, many banks are now removing these requirements to promote financial inclusion. As Punjab National Bank stated, their customer-first initiative aims to support priority segments like women, farmers, and low-income households by providing easier access to banking services.

ICICI Bank’s Major Changes in 2025

New minimum balance requirements from August 1, 2025

ICICI Bank has announced significant increases to their minimum average balance (MAB) requirements effective August 1, 2025. For new accounts opened after this date, customers must maintain Rs 50,000 in metro and urban branches (up from Rs 10,000), Rs 25,000 in semi-urban areas (previously Rs 5,000), and Rs 10,000 in rural locations (increased from Rs 2,500).

Comparison of old vs new balance requirements across branch types

The changes represent a five-fold increase across all branch categories, making ICICI’s requirements the steepest among domestic banks. While public sector banks like SBI and PNB maintain zero-balance accounts, other private banks like HDFC Bank require significantly less with Rs 10,000 for metro branches, Rs 5,000 for semi-urban, and Rs 2,500 for rural branches.

Who these changes affect and exemptions available

These new requirements only apply to accounts opened on or after August 1, 2025, while existing accounts will continue with their current balance requirements. Several exemptions exist for zero-balance accounts, including salary accounts, PM Jan Dhan Yojana accounts, and basic savings bank deposit accounts. Additionally, pensioners and customers under Family Banking programs (where combined balances must be 1.5 times the program threshold) are exempt from minimum balance penalties.

Complete Guide to Top Indian Banks’ Minimum Balance Rules

Complete Guide to Top Indian Banks’ Minimum Balance Rules

A. Private sector banks minimum balance requirements (HDFC, Kotak, Axis, Yes Bank)

HDFC Bank requires ₹10,000 monthly balance in urban branches, ₹5,000 in semi-urban areas, and ₹2,500 quarterly in rural branches. Kotak Mahindra mandates ₹10,000-₹20,000 depending on account type, with a 6% penalty on shortfalls. Axis Bank requires ₹10,000 for all locations or a fixed deposit of ₹50,000, while Priority accounts need ₹2,00,000. Yes Bank offers zero-balance basic accounts, but requires ₹10,000 for Savings PRO and ₹25,000 for PRO Plus accounts.

B. Public sector banks minimum balance requirements (SBI, BOB, PNB, Union Bank)

SBI has eliminated minimum balance requirements across all locations. Bank of Baroda requires a Quarterly Average Balance of ₹2,000 for metro branches, ₹1,000 for semi-urban, and ₹500 for rural locations. PNB mandates ₹10,000 monthly for metro branches, ₹5,000 for urban, ₹2,000 for semi-urban, and ₹1,000 for rural branches. Union Bank of India requires quarterly balances of ₹1,000 for metro/urban branches, ₹500 for semi-urban branches, and just ₹250 for rural locations.

C. Banks offering zero minimum balance accounts

Several banks now offer zero minimum balance accounts, providing financial inclusion for all income levels. State Bank of India leads with zero balance requirements for all Savings Bank and Savings Plus accounts across all branch locations. Bank of India similarly requires no minimum balance. Canara Bank recently waived the average monthly balance requirement for all types of savings accounts, ensuring customers face no penalties for maintaining low balances.

Penalty Charges and Additional Fees You Should Know

How penalty charges are calculated for insufficient balance

Several major Indian banks have recently eliminated minimum balance requirements and associated penalty charges. Previously, banks like PNB calculated penalties proportionally to the shortfall amount from the required minimum balance. This means customers were charged a percentage of the difference between their actual balance and the required minimum average balance (MAB).

ATM transaction fees and free transaction limits

While many public sector banks including Bank of Baroda, Indian Bank, Canara Bank, PNB, SBI, and Bank of India have waived minimum balance requirements effective July 2025, premium savings accounts at some banks may still maintain these requirements. This shift toward eliminating penalties aims to promote financial inclusion and reduce financial pressure on customers, particularly benefiting priority segments like women, farmers, and low-income households.

Smart Strategies to Avoid Minimum Balance Penalties

Smart Strategies to Avoid Minimum Balance Penalties

Alternative options like fixed deposits to meet requirements

With many banks setting their own minimum balance requirements—ranging from ₹2,000 to ₹50,000 as seen with ICICI Bank’s recent changes—customers need strategic approaches to avoid penalties. One effective strategy is leveraging the differences between banks, as state-run banks typically offer lower minimum balance requirements than private banks. Many PSU banks, including SBI, Punjab National Bank, Canara Bank, and Indian Bank, have completely eliminated these requirements, giving customers flexibility without maintaining any minimum balance.

Special account types with lower balance requirements

For those still banking with institutions that enforce minimum balance rules, special account types can provide relief. Jan Dhan accounts are specifically exempt from these requirements. Additionally, banking customers should consider the location of their branch, as minimum balance requirements differ significantly between metro/urban branches and semi-urban/rural branches. For example, ICICI Bank’s requirements for rural branches (₹10,000) are considerably lower than for metro locations (₹50,000), potentially saving customers from the 6% shortfall penalty.

Family banking programs and pensioner exemptions

As Governor Malhotra noted, some banks have completely exempted certain customer categories from minimum balance requirements. These exemptions often apply to pensioners and participants in special family banking programs. By enrolling in these specialized services, customers can maintain their accounts without worrying about minimum balance penalties while still accessing government schemes like accident insurance, life insurance, and the Atal pension scheme that the RBI Governor highlighted as important financial tools.

Navigating the minimum balance requirements of Indian banks doesn’t have to be complicated. As we’ve seen, understanding ICICI Bank’s 2025 changes and staying informed about the various requirements across top banks can help you manage your finances more effectively. Being aware of potential penalty charges and implementing smart strategies to maintain your minimum balance will save you unnecessary expenses.

Remember, the right banking approach depends on your individual financial situation. Take time to review your bank’s specific requirements, consider zero-balance account options if appropriate, and set up alerts to avoid penalties. With proper planning and awareness, you can maintain a healthy banking relationship while keeping your money working for you rather than paying avoidable fees.

Frequently Asked Questions (FAQ)

1. What is the minimum balance requirement in Indian savings accounts for 2025?

• It varies by bank, account type, and location (metro, urban, semi-urban, rural). Some private banks have raised requirements (e.g., ICICI Bank: ₹50,000 in metro/urban branches), while many public banks like SBI, PNB, and Indian Bank have completely waived these rules for standard savings accounts.

2. Are there any banks in India that offer zero balance savings accounts?

• Yes. Leading banks such as SBI, Indian Bank, PNB, Bank of Baroda, Axis Bank, and several others provide zero balance savings accounts (often called Basic Savings Bank Deposit Accounts or BSBDA). Many have removed penalties for not maintaining a minimum balance.

3. What happens if I fail to maintain the minimum balance?

• In banks that require maintenance of a minimum balance (such as ICICI or HDFC), you may be charged a penalty (ICICI: 6% of the shortfall or ₹500, whichever is lower). Zero-balance and BSBDA accounts are exempt from such penalties.

4. Why do banks set different minimum balance amounts?

• The Reserve Bank of India (RBI) does not regulate minimum balance requirements; banks set these based on their business needs and target customers. This is why the rules can differ so widely.

5. What are the benefits of a zero-balance savings account?

• No obligation to maintain a minimum balance or pay penalties. These accounts are designed for financial inclusion and often come with basic banking features (passbook, ATM/debit card, digital banking), but may have limits on free transactions per month.

6. Who can open a zero-balance savings account?

• Usually anyone can, but they are particularly suitable for students, senior citizens, first-time account holders, and beneficiaries of government schemes. You typically need basic documents like Aadhaar, PAN, and proof of address.

7. Has any bank recently changed its minimum balance policy?

• Yes. ICICI Bank raised the minimum average balance substantially for new accounts starting August 2025. Indian Bank, PNB, Canara Bank, SBI, and Bank of Baroda have removed minimum balance requirements, promoting inclusivity.

8. What documents are required to open a savings account or zero-balance account?

• Aadhaar card, PAN card or Form 60 (if PAN unavailable), proof of address, and a passport-sized photo are typically needed.

9. Do zero-balance accounts have transaction limits?

• Yes. Most zero-balance accounts restrict the number of free transactions per month (usually around four). Exceeding this may convert your account to a regular savings account or attract fees.

10. How can I check the minimum balance requirement for my bank?

• Visit your bank’s official website or branch for precise, up-to-date rules for your specific account type and region, as the requirements can change frequently.